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2005-Impediments-Crossborder-Arner-LejotImpediments to Cross-border Investments in Asian Bonds

Authored by Douglas Amer, Paul Lejot and S. Ghon Rhee

Published in 2005 by ISEAS Publications

Following the Asian financial crisis, the development of local currency bond markets in each of the APEC economies as well as regional bond markets has received the highest priority among financial market policy-makers. Bond markets are considered as an alternative vehicle for domestic savings mobilization and also as a critical means of mitigating the dual mismatch problems of currency and maturity. However, tangible achievement have yet to materialize. The appeal of Asian bonds as evidenced by cross-border investments in dismally insignificant.

Given the limited level of market activities associated with foreign investment in Asian bonds and with the supply of local currency or foreign currency denominated bonds issued by foreign borrowers in Asia, this study is desgined to identify the types of impediments to cross-border investment in Asian bonds and to propose policy recommendations.

  1. Introduction

  2. An overview of Asian bond markets

  3. Inter-and intra-regional capital flows

  4. Impediments to cross-border debt market activity

  5. Policy implications