An Anatomy of Corporate Bond Markets: Growing Pains and Knowledge Gains

26 Pages Posted: 3 Mar 2006

See all articles by Pipat Luengnaruemitchai

Pipat Luengnaruemitchai

International Monetary Fund (IMF)

Li Ong

International Monetary Fund (IMF)

Date Written: July 2005

Abstract

The objective of this paper is to discuss the key issues relating to the development of local corporate bond markets. We examine the requirements for local corporate bond market development, and compare and contrast experiences across both mature and emerging markets. We suggest that core aspects such as benchmarking, corporate governance and disclosure, credit risk pricing, the availability of reliable trading systems, and the development of hedging instruments are fundamental for improving the breadth and depth of corporate debt markets. The demand and supply of corporate bonds are dependent on factors such as the investor base, both local and foreign, and government policies toward the issuance process and associated costs, as well as the taxation regime. The sequencing of reforms is key to overall market development.

Keywords: Benchmark, corporate debt, credit pricing, emerging markets, governance, mature markets, regulation

JEL Classification: G15, G18

Suggested Citation

Luengnaruemitchai, Pipat and Ong, Li, An Anatomy of Corporate Bond Markets: Growing Pains and Knowledge Gains (July 2005). IMF Working Paper No. 05/152, Available at SSRN: https://ssrn.com/abstract=888021

Pipat Luengnaruemitchai (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-9733 (Phone)

Li Ong

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States