A Spare Tire for Capital Markets: Fostering Corporate Bond Markets in Asia

38 Pages Posted: 30 Jun 2016

Date Written: June 2016

Abstract

A report prepared for EMEAP by Marlene Amstad, Steven Kong, Frank Packer and Eli Remolona at the request of Mr Grant Spencer, Deputy Governor of the Reserve Bank of New Zealand and Chair of the EMEAP Working Group on Financial Markets.

The eight local currency bond markets in which the Asian Bond Funds 2 (ABF2) invests have continued to develop since 2011. But the development of corporate bonds continues to lag that of government bonds. We focus on areas where we believe there remains work to be done to foster corporate bond markets. In primary markets, we suggest measures to expand the range of credit quality and develop infrastructure bonds as an asset class. In secondary markets, we recommend enhancing liquidity through developing regional mechanisms to increase post-trade transparency as well as through developing hedging markets. In repo markets, there may be room for conducting a survey to fill information gaps and identify where policy actions might have the greatest effect.

Keywords: corporate bonds, credit ratings, infrastructure finance, post-trade transparency, foreign exchange swap markets, repo markets

JEL Classification: G18, G23, G24, H54, H63

Suggested Citation

Settlements, Bank for International, A Spare Tire for Capital Markets: Fostering Corporate Bond Markets in Asia (June 2016). BIS Paper No. 85, Available at SSRN: https://ssrn.com/abstract=2802234

Bank for International Settlements (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4051
Switzerland

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