Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines the evolving importance of banks and securities markets during the process of economic development. As economies develop, they increase their demand for the services provided by securities markets relative to those provided by banks, such that securities markets become increasingly important for future economic development. Some exploratory evidence further suggests that deviations of a country's actual financial structure-the mixture of banks and markets operating in an economy-from the estimated optimal structure are associated with lower levels of economic activity.

International Finance --- General Financial Markets --- Financial Institutions and Services --- Financial Markets • Saving and Capital Investment • Corporate Finance and Governance

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Inflation --- Growth --- Financial market frictions --- Financial repression --- O16 --- F43 --- E31 --- Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance --- Economic Growth of Open Economies --- Price Level; Inflation; Deflation

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

In recent years, the number of countries which have borrowed in international capital markets by issuing sovereign bonds has increased substantially. For these countries, capital market access meant a de facto acknowledgement of their policy successes and improvements in their creditworthiness that enabled them to graduate from the group of official financing recipients into a more advanced group of emerging market economies. The paper looks at the determinants of sovereign bond issuances and derives the relationship between internal and external factors and market access using a simple macro model. The market access condition is then translated into a simple rule that requires an excess demand for the sovereign bonds in question. Regression results based on this model offer some insights into peculiarities of first-time sovereign bond issues that could be used in policy deliberations.

Finance: General --- Investments: Bonds --- International Lending and Debt Problems --- International Financial Markets --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- General Financial Markets: General (includes Measurement and Data) --- Investment & securities --- Finance --- Sovereign bonds --- Bonds --- Emerging and frontier financial markets --- Securities markets --- International capital markets --- Financial institutions --- Financial markets --- Capital market --- Financial services industry --- United States

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Central banks often buy or sell reserves-–-so called FX interventions (FXIs)---to dampen sharp exchange rate movements caused by volatile capital flows. At the same time, these interventions may entail unintended side effects. In this paper, we investigate whether FXIs incentivize firms to take on more unhedged FX debt, thereby increasing medium-term corporate vulnerabilities. Using a novel dataset with close to 5,000 nonfinancial firms across 19 emerging markets covering 2002--2017, we find that the firm-level share of FX debt rises following intensive use of FXIs, particularly for non-exporting firms in shallow financial markets with no FX debt to begin with. The magnitude of this effect is economically significant, with one standard deviation increase in FXI leading to an average 2 percentage points increase in the FX debt share. For reference, the median share of FX debt in the sample is zero.

Foreign Exchange --- Money and Monetary Policy --- International Lending and Debt Problems --- Portfolio Choice --- Investment Decisions --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- Monetary economics --- Exchange rate arrangements --- Exchange rates --- Currencies --- Exchange rate flexibility --- Money --- United States

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 2005. The renminbi has become more flexible over time but is still carefully managed, and depth and liquidity in the onshore FX market is relatively low compared to other countries with de jure floating currencies. Allowing a greater role for market forces within the existing regime, and greater two-way flexibility of the exchange rate, are important steps to build on the progress already made. This should be complemented by further steps to develop the FX market, improve FX risk management, and modernize the monetary policy framework.

International Monetary Fund --- Internationaal monetair fonds --- International monetary fund --- Evaluation. --- Foreign Exchange --- Money and Monetary Policy --- International Monetary Arrangements and Institutions --- International Financial Markets --- Economic Development: Financial Markets --- Saving and Capital Investment --- Corporate Finance and Governance --- Economic History: Financial Markets and Institutions: General, International, or Comparative --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Currency --- Foreign exchange --- Monetary economics --- Exchange rates --- Exchange rate flexibility --- Exchange rate arrangements --- Currencies --- Money --- China, People's Republic of