How Can Emerging Market Economies Benefit from a Corporate Bond Market?
How Can Emerging Market Economies Benefit from a Corporate Bond Market?
This chapter explores the effects of creating a corporate bond market in emerging market economies on the efficiency of capital allocation. It argues that creating a corporate bond market and decoupling the banking sector from public finances reduces the fragility of the banking sector and shields a greater proportion of corporations from the consequences of government debt crises. The formal model in Bolton and Freixas (2006) is also used to evaluate the effects of different types of policies, such as financial liberalization or the creation of a market for collateralized debt obligations on the efficient allocation of capital and the incidence of debt crises.
Keywords: corporate bond market, emerging market economies, capital allocation, financial liberalization, collateralized debt obligations
MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
Please, subscribe or login to access full text content.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.
