Why Doesn't Asia Have Bigger Bond Markets? / Barry Eichengreen, Pipat Luengnaruemitchai.

Format:

Book

Author/Creator:

Eichengreen, Barry.

Contributor:

National Bureau of Economic Research.

Luengnaruemitchai, Pipat.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10576.

NBER working paper series no. w10576

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2004.

Summary:

Asia's underdeveloped bond markets and dependence on bank finance have been topics of concern since the crisis of 1997-8. In this paper we document that the slow development of Asian bond markets is a phenomenon with multiple dimensions. Larger country size, stronger institutions, less volatile exchange rates, and more competitive banking sectors tend to be positively associated with bond market capitalization. Asian countries' strong fiscal balances, while admirable on other grounds, have not been conducive to the growth of government bond markets. The results suggest that the region's structural characteristics and macroeconomic and financial policies account fully for differences in bond market development between Asia and the rest of the world. Once one controls for these characteristics and policies, in other words, there is no residual Asia effect.'

Notes:

Print version record

June 2004.