Local Currency Bond Markets and the Asian Bond Fund 2 Initiative

27 Pages Posted: 15 Feb 2012 Last revised: 5 Oct 2013

See all articles by Eric Chan

Eric Chan

affiliation not provided to SSRN

Michael K.F. Chui

Bank for International Settlements (BIS)

Frank Packer

Bank for International Settlements (BIS)

Eli M. Remolona

Bank for International Settlements (BIS) - Monetary and Economic Department

Multiple version iconThere are 2 versions of this paper

Date Written: January 1, 2012

Abstract

Liquidity in the eight government bond markets in which the ABF2 invests has improved significantly since the fund's inception in 2005. These improvements may be traced to the consolidation of issuance in a few benchmark maturities, an increase in market making activity, and the lowering of barriers to participation by non-resident investors. In each of these factors, the ABF2 project played an important catalytic role. But there remains work to be done. Local-currency corporate bond markets have yet to develop active secondary markets. These markets would benefit from more effective market making arrangements and the introduction of certain types of derivatives.

Full publication: Weathering Financial Crises: Bond Markets in Asia and the Pacific

Keywords: Bond markets, yield curve, derivatives, market liquidity

JEL Classification: E43, F21, G12, G18

Suggested Citation

Chan, Eric and Chui, Michael K.F. and Packer, Frank and Remolona, Eli M., Local Currency Bond Markets and the Asian Bond Fund 2 Initiative (January 1, 2012). BIS Paper No. 63f. Available at SSRN: https://ssrn.com/abstract=2005843

Eric Chan

affiliation not provided to SSRN

Michael K.F. Chui (Contact Author)

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

Frank Packer

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland
4161 280 8449 (Phone)

Eli M. Remolona

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

IFC 2 Bldg, 78/F
Central
Hong Kong
Hong Kong
+852 2982 7150 (Phone)
+852 2982 7123 (Fax)

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