Bond Market Development in East Asia: Issues and Challenges
Fabella, Raul; Madhur, Srinivasa | January 2003
Abstract
In postcrisis Asia, the development of domestic bond markets is increasingly seen
as one of the key requirements to strengthen the financial sectors of East Asian countries
and to reduce their vulnerabilities to future financial crises. There is a great diversity
in terms of the level of bond market development across East Asian countries. Judged
by several indicators of bond market development, Hong Kong, China and Singapore
are ahead of other countries, followed by a second tier consisting of Korea; Malaysia;
and Taipei,China and a third tier consisting of People’s Republic of China, Philippines,
and Thailand. Indonesia’s bond market is perhaps the most nascent among East Asian
bond markets. Initiatives to develop bond markets in East Asia should focus on: (i)
sustaining a stable macroeconomic environment with low inflation and stable interest
rates, (ii) developing a healthy government bond market that would serve as a benchmark
for the corporate bond market, (iii) completing the postcrisis agenda of banking sector
restructuring, (iv) improving corporate governance, (v) strengthening the regulatory
framework for bond market, (vi) rationalizing tax treatment of bonds, (vii) broadening
the investor base, and (viii) promoting the growth of regional bond market centers. Since
at present there is a great diversity in the levels of bond market development across
countries, significant country-specific deciphering of these requirements will be needed
for developing country strategies for bond market development.
Citation
Fabella, Raul; Madhur, Srinivasa. 2003. Bond Market Development in East Asia: Issues and Challenges. © Asian Development Bank. http://hdl.handle.net/11540/1521.ISSN
1655-5252
Keywords
Financial Stability
Financial Management System
Financial Restructuring
Capital Market Development
Erosion
Market Development
Economics
Erosion
International Economics
International Financial Market
Multilateral Financial Institutions
Economic Recession
Market
Crisis
Business recessions
Multilateral development banks
Regulatory reform
Capital
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Citable URI
http://hdl.handle.net/11540/1521Metadata
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