Government Bonds in Domestic and Foreign Currency : The Role of Macroeconomic and Institutional Factors
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 comp...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/03/2181643/government-bonds-domestic-foreign-currency-role-macroeconomic-institutional-factors http://hdl.handle.net/10986/18316 |
| Summary: | 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. |
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