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ATTRACTING FOREIGN PARTICIPATION IN ASIAN LOCAL CURRENCY BOND MARKETS: THE CASE OF THE ASIAN BOND FUND 2 INITIATIVE
Author(s) -
PACKER FRANK,
REMOLONA ELI
Publication year - 2012
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/j.1468-0106.2012.00591.x
Subject(s) - bond market , local currency , bond , government bond , currency , government (linguistics) , economics , investment (military) , financial system , business , financial market , corporate bond , finance , international economics , monetary economics , politics , political science , linguistics , philosophy , law
The Asian Bond Fund 2 (ABF2) is a $US2bn initiative by a group of central banks in Asia and the Pacific. To promote local currency government bond markets, the fund has been investing in 8 such markets in the region. These markets have made impressive strides since the fund's inception in 2005. The improvements may be traced in large part to overcoming a number of market impediments, including barriers to cross‐border investment. The ABF2 project has played an important catalytic role in market reforms aimed at removing these impediments. However, while the government bond markets have come of age, the corporate bond markets have remained immature. To develop, the immature markets would likely require the benefits of further opening up to regional issuance and investment flows.