Government Bonds in Domestic and Foreign Currency: The Role of Macroeconomic and Institutional Factors

48 Pages Posted: 29 Sep 2017

See all articles by Stijn Claessens

Stijn Claessens

Bank for International Settlements (BIS)

Daniela Klingebiel

World Bank - Policy Unit

Sergio L. Schmukler

World Bank - Development Research Group (DECRG)

Multiple version iconThere are 2 versions of this paper

Date Written: March 31, 2003

Abstract

The development of government bond markets and, in particular, their currency composition have recently received much interest, partly because of their relation with financial crises. The authors study the determinants of the size and currency composition of government bond markets for a panel of industrial and developing countries. They find that countries with larger economies, greater domestic investor bases, and more flexible exchange rate regimes have larger domestic currency bond markets, while smaller economies rely more on foreign currency bonds. Better institutional frameworks and macroeconomic fundamentals enhance both domestic currency bond markets and increase countries' ability to issue foreign currency bonds, while they raise the share of foreign exchange bonds.

Keywords: Banks & Banking Reform, Public Sector Economics, International Terrorism & Counterterrorism, Macroeconomic Management, Payment Systems & Infrastructure, Economic Theory & Research, Environmental Economics & Policies

Suggested Citation

Claessens, Stijn and Klingebiel, Daniela and Schmukler, Sergio, Government Bonds in Domestic and Foreign Currency: The Role of Macroeconomic and Institutional Factors (March 31, 2003). World Bank Policy Research Working Paper No. 2986. Available at SSRN: https://ssrn.com/abstract=3044149

Stijn Claessens (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Daniela Klingebiel

World Bank - Policy Unit ( email )

1818 H Street NW
Room MC 9-903
Washington, DC 20433
United States
202-473-7470 (Phone)
202-522-2031 (Fax)

Sergio Schmukler

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN MC 3-301
Washington, DC 20433
United States
202-458-4167 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://www.worldbank.org/en/about/people/s/sergio-schmukler

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