## Appendix I.

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---

### I. INTRODUCTION
- A vibrant and deep local currency domestic bond market promotes financial stability and economic growth.
- Macroeconomic and financial dislocations in emerging markets (EMs) following the crises of the late-1990s have led to increased efforts to develop local bond markets as an alternative source of debt financing (IMF, 2005).
- Local currency bond markets reduce currency mismatches and lengthen debt duration.
- Such markets generate market-determined interest rates reflecting opportunity costs at different maturities (Committee on the Global Financial System, CGFS 2007).

### Role of foreign investors in bond market development
- Foreign investors can act as catalysts for local bond market development by:
  - Diversifying the institutional investor base and creating greater demand for local EM debt securities.
  - Increasing trading activity (foreign investors are more likely to trade versus domestic buy-and-hold investors), contributing to greater liquidity.
  - Supporting increased market liquidity and potentially lower yields (qualitative case-study evidence; World Bank and IMF, 2001).
- Empirical evidence on benefits and costs is limited due to data constraints (Daniel, 2008).

### Risks from foreign participation and market volatility
- Increased foreign presence can result in greater volatility in local bond markets.
- EMs can be seriously affected by sudden drying-up of capital flows driven by spikes in global risk aversion (Calvo and Talvi, 2005).
- Foreign involvement can increase susceptibility to market volatility (World Bank and IMF, 2001; BIS, 2002).
- The 2008 global financial crisis showed markets and institutions most exposed to foreign investors bore significant spillovers.

### II. EM DOMESTIC BOND MARKET DEVELOPMENTS
- Outstanding stock of domestic bonds in EMs:
  - Total: $7,212.8 (end-2008)
  - Domestic: $6,251.2 (end-2008)
  - International: $961.6 (end-2008)
- Domestic vs. international issuance:
  - Outstanding stock of domestic bonds now exceeds $6 trillion compared with only $1 trillion in the mid-1990s (BIS quarterly statistics).
  - International bonds issued by EMs amounted to about $1 trillion at end-2008.
  - About $157 billion of such bonds were issued in the currency of the EM issuer:
    - Local currency: $157.4
    - Foreign currency: $804.2
  - Local currency share: >95 percent; Foreign currency share: <5 percent (survey evidence).
- Foreign participation:
  - Non-resident bond holdings of nine EMs increased sevenfold between 2002 and 2006 (CGFS 2007).
  - New time-series database for 10 EMs (Brazil, Czech Republic, Hungary, Indonesia, Mexico, Malaysia, Korea, Thailand, Turkey, Poland) from Asiabondonline (ADB) and IMF country desk, 2000–2009.
  - Foreign participation grew over 2000–2008 with a dip in late-2008 related to the global crisis.
- Investor composition and market structure:
  - Domestic banks held 42 percent of all domestic debt securities in 2005 versus 28 percent in 2000 (CGFS 2007).
  - Domestic institutional investors’ share rose from 29 percent in 2000 to 38 percent in 2005 (CGFS 2007).
  - Fixed-rate bonds: increased from 65 percent to 71 percent over five years (CGFS 2007); Latin America example: 23 percent fixed-rate.
  - Remaining maturities lengthened from 3.2 years in 2000 to 4.5 years in 2005 (BIS Quarterly Review); Asia’s larger economies improved from 2.7 years in 2000 to 6.1 years in 2005.

### III. BENEFITS AND COSTS OF FOREIGN PARTICIPATION: LITERATURE REVIEW
- Potential benefits:
  - Can lower bond yields by increasing demand for local EM debt (IMF, 2005).
  - Global bond funds generally underweight EMs, indicating scope for reallocation to EMs (MSCI Barra and IMF (2010)).
  - Greater investor diversity can increase trading, price discovery, liquidity, and market efficiency.
  - Supports development of liquid benchmarks and improved secondary-market liquidity (examples: Australia, Singapore).
  - May pressure stronger corporate governance and institutional reform, stabilizing markets long run (Prasad and Rajan, 2008).
- Potential costs/risks:
  - Sudden withdrawals by foreign investors can increase interest rate volatility (example: post-Lehman September 2008).
  - Volatility increases can (i) temporarily raise new borrowing costs and (ii) complicate monetary policy if central banks intervene.
  - Rapid foreign participation growth relative to supply could fuel asset price bubbles, especially with concentration/herding and weak institutional development (IMF, 2005).
- Empirical gaps:
  - Sparse empirical analysis on determinants of local currency bond market yields in EMs and on foreign investors’ role (data limitations).
  - Related research focuses more on sovereign foreign-currency spreads and on domestic fundamentals in mature markets.
  - Emerging evidence shows global factors increasingly affect government securities markets (Hauner and Kumar, 2006; Kumar and Okimoto, 2009).
  - Baldacci and Kumar (2009): countries with larger capital inflows (FDI > 10 percent of GDP) benefit from lower increases in government bond yields when deficits expand; global risk aversion (VIX) amplifies deficits’ effect.
- Volatility literature:
  - Sparse for EM bond yield volatility; derivative markets in EMs often too underdeveloped for implied volatility measures.
  - Past studies typically analyze volatility contagion rather than the direct role of foreign participation.

### IV. DATA, METHODOLOGY, AND EMPIRICAL RESULTS
- Data definitions and sources:
  - Foreign participation (FP): share of outstanding stock of domestic government securities held by non-residents.
  - Quarterly FP data from Asiabondonline (ADB) and IMF country desk for 10 EMs, 2000–2009.
  - Long-term nominal local currency bond yields: IFS (IMF) for most; generic 5-year local currency domestic government bond from Bloomberg for Brazil, Indonesia, Turkey where IFS incomplete.
  - Macroeconomic and financial controls from IFS and IMF Global Data Source.
  - Sample excludes some active EMs (Russia, India, South Africa) and frontier markets due to data availability.
- Panel methodology and baseline model:
  - Panel framework for 10 EMs, 2000Q1–2009Q1, following Baldacci and Kumar (2009).
  - Baseline reduced-form (fixed effects least squares):
    - Lr_it = α_i + β1 Srit + β2 πit + β3 bit + β4 Dit-1 + β5 Mit + β6 GDPit + β7 USr_it + β8 CAit + β9 FPit + ε_it
    - Variables: Lr = benchmark long-term nominal government bond yield; Sr = short-term nominal policy rate; π = inflation; b = fiscal deficit (% of GDP); D = gross general government debt (% of GDP); M = broad money growth; z/GDP = real GDP growth; USr = U.S. long-term treasury yield; CA = current account balance; FP = foreign participation share.
  - Stationarity: All variables stationary by Pesaran’s ADF test except public debt (I(1)); public debt excluded from baseline.
  - Hausman test rejected random effects. Instrumenting FP with GMM does not change statistical significance.
- Panel estimation (most parsimonious model; five significant determinants):
  - Policy interest rates coefficient: 0.12 (t-stat 4.63) — significant at 5 percent.
  - Inflation coefficient: 0.16 (t-stat 5.26) — significant at 5 percent.
  - Fiscal deficit coefficient: 0.05 (t-stat 1.74) — significant at 10 percent.
  - Foreign participation coefficient: -0.06 (t-stat 4.71) — significant at 5 percent.
  - Current account deficit coefficient: 0.13 (t-stat 5.08) — significant at 5 percent.
  - U.S. Interest Rate coefficient: 0.45 (t-stat 3.54) — significant at 5 percent.
  - Constant: 5.38 (t-stat 15.82).
  - R-Square (within): 0.40; F-statistic: 129.3.
- Key quantitative empirical findings:
  - A 1 percentage point increase in the share of foreign investors in the government bond market lowers long-term yields by about 6bps on average.
  - The annualized impact of a 1 percent rise in the fiscal balance to GDP on EMs’ long-term yields is about 20bps.
  - Long-term yields respond to changes in policy interest rates, inflationary expectations, and U.S. long-term interest rates; current account balance matters in EMs.
  - Domestic monetary aggregates and real economic activity were not significant for long-term yields in this sample.
- Volatility analysis (time series GARCH approach):
  - GARCH(1,1) with foreign participation entering multiplicatively in the conditional variance:
    - Mean: Lr_t = θ + Σ θ_j Lr_{t-j} + ε_t, ε_t ~ N(0, σ_t^2)
    - Variance: σ_t^2 = exp(φ + γ FP_t) + α ε_{t-1}^2 + β σ_{t-1}^2
  - Interpretation: sign of γ estimates impact of foreign participation on yield volatility.
  - Monthly data 2000 onward: country-level results for impact of FP on volatility:
    - Brazil: Not Significant
    - Czech Republic: Not Significant
    - Hungary: Not Significant
    - Indonesia: Not Significant
    - Korea: (+)** (significant at 5 percent)
    - Malaysia: (-)* (significant at 10 percent)
    - Mexico: (-)** (significant at 5 percent)
    - Poland: Not Significant
    - Thailand: Not Significant
    - Turkey: (-)** (significant at 5 percent)
  - Interpretation: foreign participation significantly increases yield volatility in Korea and significantly decreases yield volatility in Malaysia, Mexico, and Turkey; not significant in other sample countries.
- Robustness and caveats:
  - Results robust to adding VIX and alternative global interest measures.
  - FP impact remains significant when instrumented via GMM, suggesting endogeneity is not driving results.
  - Limitations: potential omitted variables (e.g., data on domestic institutional investor behavior unavailable); panel of 10 EMs may not generalize; volatility analysis is statistical, not structural.

### V. CONCLUSIONS
- Main conclusions from the 10-EM sample (2000–09):
  - Foreign participation is associated with lower long-term local currency government bond yields: 1 percentage point higher FP → ~6bps lower yields.
  - No general evidence that greater foreign participation necessarily increases bond yield volatility; in some cases it dampens volatility.
  - Foreign participation has risen sharply alongside growth in local currency EM bond markets, prompting questions about deepening versus vulnerability to global shocks.
  - For this sample and period, foreign participation has been beneficial for local currency bond yields in EMs, but this is not a definitive cost–benefit assessment of opening markets to foreigners.
- Policy-relevant implications:
  - Allowing foreign participation can help deepen domestic bond markets and lower borrowing costs, subject to adequate institutional and regulatory frameworks.
  - Prudential measures to limit excessive concentration and individual exposures could mitigate risks of asset price bubbles.
  - Policymakers should consider country-specific institutional capacity when evaluating the optimal degree and sequencing of market opening to foreign investors.

*Source: _wp1088 - Appendix I.*

### Appendix I. ............................................................................................................

### Appendix I.

### I. INTRODUCTION

- A vibrant and deep local currency domestic bond market promotes financial stability and economic growth.
- The macroeconomic and financial dislocations in emerging markets (EMs) following the crises of the late 1990s have led to increased efforts in these countries to develop local bond markets as an alternative source of debt financing for the public and corporate sectors (IMF, 2005).
- Local currency bond markets can help financial stability by reducing currency mismatches and lengthening the duration of debt.
- Such markets also help economic efficiency by generating market-determined interest rates that reflect the opportunity costs of funds at different maturities (Committee on the Global Financial System, CGFS 2007).

### Role of foreign investors in bond market development

- Foreign investors could act as catalysts for the development of local bond markets, particularly by diversifying the institutional investor base and creating greater demand for local EM debt securities.
- Domestic institutional investors are typically buy-and-hold investors, while foreign investors are more likely to trade and therefore contribute to a more liquid market.
- Selected case studies in emerging and mature government bond markets provide qualitative evidence that foreign participation can be supportive of increased market liquidity and thus lower yields (World Bank and IMF, 2001).
- However, there remains a lack of strong empirical evidence on the benefits and costs of foreign participation in bond market development, due to lack of data (Daniel, 2008).

### Risks from foreign participation and market volatility

- An increased foreign presence could also result in greater volatility in local bond markets.
- Experience shows that EMs can be seriously hit by the sudden drying-up of capital flows resulting from an increase in risk aversion, sometimes irrespective of a country’s fundamentals (see Calvo and Talvi, 2005).
- Thus, foreign involvement in the bond market can make host economies more susceptible to market volatility (World Bank and IMF, 2001, and BIS, 2002).
- This is borne out by the fact that the EM financial markets and institutions most exposed to foreign investors (e.g., EM equity markets rather than bond markets and banks in Central and Eastern Europe that were reliant on foreign borrowing) took the brunt of the spillovers of the 2008 global financial crisis.

### Research objective and approach of the paper

- The paper estimates the impact of foreign participation in determining long-term local currency government bond yields and volatility in a group of emerging markets.
- It compiles a novel database of foreign participation in a representative group of 10 EMs over the last decade to quantify the impact of foreign participation in reducing local currency EM bond yields.
- The paper is structured as follows: Section II briefly discusses recent bond market developments in EMs.

*Source: _wp1088 - Appendix I.*

### Section III reviews the relevant literature and addresses three questions: (i) Can foreign

### _wp1088 - Section III reviews the relevant literature and addresses three questions: (i) Can foreign

### II. EM DOMESTIC BOND MARKET DEVELOPMENTS
- Outstanding stock of domestic bonds in EMs:
  - Total: $7,212.8 (end-2008)
  - Domestic: $6,251.2 (end-2008)
  - International: $961.6 (end-2008)
- Domestic vs. international issuance:
  - Outstanding stock of domestic bonds now exceeds $6 trillion compared with only $1 trillion in the mid-1990s (BIS quarterly statistics).
  - International bonds issued by EMs amounted to about $1 trillion at end-2008.
  - About $157 billion of such bonds were issued in the currency of the EM issuer.
  - Local currency: $157.4; Foreign currency: $804.2 (table breakdown).
  - Local currency share: >95 percent; Foreign currency share: <5 percent (survey evidence).
- Foreign participation:
  - Non-resident bond holdings of nine EMs increased sevenfold between 2002 and 2006 (CGFS 2007).
  - New time-series database compiled for 10 EMs (Brazil, Czech Republic, Hungary, Indonesia, Mexico, Malaysia, Korea, Thailand, Turkey, and Poland) from Asiabondonline (ADB) and IMF country desk data, 2000–2009.
  - Foreign participation grew over 2000–2008 with a dip in late-2008 related to the global crisis.
- Investor composition and market structure:
  - Domestic banks held 42 percent of all domestic debt securities in 2005 versus 28 percent in 2000 (CGFS 2007).
  - Domestic institutional investors’ share rose from 29 percent in 2000 to 38 percent in 2005 (CGFS 2007).
  - Fixed-rate bonds: increased from 65 percent to 71 percent over five years (CGFS 2007); variation across regions (Latin America: 23 percent fixed-rate).
  - Remaining maturities lengthened from 3.2 years in 2000 to 4.5 years in 2005 (BIS Quarterly Review); Asia’s larger economies improved from 2.7 years in 2000 to 6.1 years in 2005.

### III. BENEFITS AND COSTS OF FOREIGN PARTICIPATION: LITERATURE REVIEW
- Potential benefits of foreign participation:
  - Can lower bond yields by increasing demand for local EM debt (IMF, 2005).
  - Global bond funds are generally underweight EMs, implying scope for portfolio reallocation into EMs (MSCI Barra and IMF (2010)).
  - Greater diversity among investors can increase trading, price discovery, liquidity, and market efficiency.
  - Foreign participation can help develop liquid benchmarks and improve secondary-market liquidity (examples: Australia, Singapore).
  - May exert pressure for stronger corporate governance and institutional reform, stabilizing markets long run (Prasad and Rajan, 2008).
- Potential costs/risks:
  - Sudden withdrawals by foreign investors can increase interest rate volatility (example: post-Lehman September 2008 episodes).
  - Volatility increases can (i) temporarily raise the cost of new borrowing and (ii) complicate monetary policy if central banks intervene.
  - Rapid growth in foreign participation relative to available supply could fuel asset price bubbles, especially with concentration/herding and where institutional development is insufficient (IMF, 2005).
- Empirical gaps:
  - Very little empirical analysis exists on determinants of local currency bond market yields in EMs and on the role of foreign investors (data limitations cited).
  - Related literature focuses more on sovereign foreign-currency spreads (EMBIG) and on domestic fundamentals in mature markets.
  - Emerging evidence shows global factors increasingly affect government securities markets (Hauner and Kumar, 2006; Kumar and Okimoto, 2009).
  - Baldacci and Kumar (2009) find countries with larger capital inflows (FDI > 10 percent of GDP) benefit from lower increases in government bond yields when deficits expand; global risk aversion (VIX) amplifies deficits’ effect.
- Volatility literature:
  - Sparse for EM bond yield volatility; derivative markets in EMs often too underdeveloped to extract implied volatility measures.
  - Past studies typically analyze volatility contagion rather than direct role of foreign participation.

### IV. DATA, METHODOLOGY, AND EMPIRICAL RESULTS
- Data:
  - Foreign participation defined as share of outstanding stock of domestic government securities held by non-residents.
  - Quarterly foreign participation data from Asiabondonline (ADB) and IMF country desk for 10 EMs, 2000–2009.
  - Long-term nominal local currency bond yields: IFS (IMF) for most countries; generic 5-year local currency domestic government bond from Bloomberg for Brazil, Indonesia, and Turkey where IFS incomplete.
  - Macroeconomic and financial controls from IFS and IMF Global Data Source (Appendix I lists data sources).
  - Sample excludes some active EMs (Russia, India, South Africa) and frontier markets due to data availability.
- Panel methodology:
  - Panel data framework modeled determinants of long-term local currency government bond yields for 10 EMs, 2000Q1–2009Q1, following Baldacci and Kumar (2009).
  - Baseline reduced-form equation (fixed effects least squares):
    - Lr_it = α_i + β1 Srit + β2 πit + β3 bit + β4 Dit-1 + β5 Mit + β6 GDPit + β7 USr_it + β8 CAit + β9 FPit + ε_it
    - Variables: Lr = benchmark long-term nominal government bond yield; Sr = short-term nominal policy rate; π = inflation; b = fiscal deficit (% of GDP); D = gross general government debt (% of GDP); M = broad money growth; z/GDP = real GDP growth; USr = U.S. long-term treasury yield; CA = current account balance; FP = foreign participation share.
  - All variables stationary by Pesaran’s ADF test except public debt (I(1)) which was excluded from baseline. Hausman test rejected random effects. Instrumenting FP with GMM does not change statistical significance.
- Panel estimation results (most parsimonious model; five significant determinants):
  - Policy interest rates coefficient: 0.12 (t-stat 4.63) — significant at 5 percent.
  - Inflation coefficient: 0.16 (t-stat 5.26) — significant at 5 percent.
  - Fiscal deficit coefficient: 0.05 (t-stat 1.74) — significant at 10 percent.
  - Foreign participation coefficient: -0.06 (t-stat 4.71) — significant at 5 percent.
  - Current account deficit coefficient: 0.13 (t-stat 5.08) — significant at 5 percent.
  - U.S. Interest Rate coefficient: 0.45 (t-stat 3.54) — significant at 5 percent.
  - Constant: 5.38 (t-stat 15.82).
  - R-Square (within): 0.40; F-statistic: 129.3.
- Key quantitative empirical findings:
  - A 1 percentage point increase in the share of foreign investors in the government bond market lowers long-term yields by about 6bps on average.
  - The annualized impact of a 1 percent rise in the fiscal balance to GDP on EMs’ long-term yields is about 20bps.
  - Long-term yields respond to changes in policy interest rates, inflationary expectations, and U.S. long-term interest rates; current account balance matters in EMs.
  - Domestic monetary aggregates and real economic activity were not significant for long-term yields in this sample.
- Volatility analysis (time series GARCH approach):
  - Used GARCH(1,1) with foreign participation entering multiplicatively in the conditional variance:
    - Mean: Lr_t = θ + Σ θ_j Lr_{t-j} + ε_t, ε_t ~ N(0, σ_t^2)
    - Variance: σ_t^2 = exp(φ + γ FP_t) + α ε_{t-1}^2 + β σ_{t-1}^2
  - Interpretation: sign of γ estimates impact of foreign participation on yield volatility.
  - Monthly data 2000 onward results:
    - Foreign participation significantly increases yield volatility in Korea [(+) at 5 percent significance].
    - Foreign participation significantly decreases yield volatility in Malaysia [(-) at 10 percent significance], Mexico [(-) at 5 percent significance], and Turkey [(-) at 5 percent significance].
    - Not significant for Brazil, Czech Republic, Hungary, Indonesia, Poland, Thailand.
  - Table summary of impact on volatility:
    - Brazil: Not Significant
    - Czech Republic: Not Significant
    - Hungary: Not Significant
    - Indonesia: Not Significant
    - Korea: (+)** (significant at 5 percent)
    - Malaysia: (-)* (significant at 10 percent)
    - Mexico: (-)** (significant at 5 percent)
    - Poland: Not Significant
    - Thailand: Not Significant
    - Turkey: (-)** (significant at 5 percent)
- Robustness and caveats:
  - Results robust to adding global risk aversion (VIX) and alternative global interest measures.
  - Endogeneity not driving result: FP impact remains significant when instrumented via GMM.
  - Limitations: potential omitted variables (e.g., time-series data on domestic institutional investor behavior not available); panel of 10 EMs may not generalize to all EMs; volatility analysis is statistical and not structural/theoretical.

### V. CONCLUSIONS
- Main conclusions from the 10-EM sample (2000–09):
  - Foreign participation is associated with lower long-term local currency government bond yields (1 percentage point higher FP → ~6bps lower yields).
  - There is no general evidence that greater foreign participation necessarily increases bond yield volatility; in some cases it dampens volatility.
  - Foreign participation has risen sharply alongside growth in local currency EM bond markets, raising questions about deepening vs. vulnerability to global shocks.
  - The study provides quantitative evidence that, for the sample and period analyzed, foreign participation has been beneficial for local currency bond yields in EMs but is not a definitive cost–benefit assessment of opening markets to foreigners.
- Policy-relevant implications (implied by analysis and literature review):
  - Allowing foreign participation can help deepen domestic bond markets and lower borrowing costs, subject to adequate institutional and regulatory frameworks.
  - Prudential measures to limit excessive concentration and individual exposures could mitigate risks of asset price bubbles.
  - Policymakers should consider country-specific institutional capacity when evaluating the optimal degree and sequencing of market opening to foreign investors.

*Source: _wp1088 (content provided).*

### REFERENCES

### _wp1088 - REFERENCES

### Academic articles and journal papers
- Ardagna, Silvia, 2009, ― Financial Market’s Behavior Around Episodes of Large Changes in the Fiscal Stance,‖ European Economic Review, 53. 37–55.
- Blanchard, Olivier, 1984, ―Current and Anticipated Deficits, Interest Rates and Economic Activity,‖ NBER Working Paper Series, 1265.
- Borio, C. E.V. and R. McCauley, 1996, ―The Economics of Recent Bond Yield Volatility,‖ BIS economic papers, No. 45.
- Brooks, C. and O.M. Currim, 2002, ―Modelling the Implied Volatility of Options on Long Gilt Futures,‖ Journal of Business Finance & Accounting, Vol. 29, pp. 111-137.
- Caporale, Guglielmo, M., and Geoffrey Williams, 2002,‖ Long-Term Nominal Interest Rates and Domestic Fundamentals,‖ Review of Financial Economics, Vol. 11, pp. 119–130.
- Laubach, Thomas, 2009, ―New Evidence on the Interest Rate Effects of Budget Deficits and Debt,‖ Journal of the European Economic Association, Vol 7, pp. 858–85.
- Gonzales-Rosada, M., and E. Levy-Yeyati, 2006, ―Global Factors and Emerging Market Spreads,‖ Inter-American Development Bank Working Paper, 552.

### NBER, working papers, and discussion papers
- Blanchard, Olivier, 1984, ―Current and Anticipated Deficits, Interest Rates and Economic Activity,‖ NBER Working Paper Series, 1265.
- Calvo, G. and E. Talvi, 2005, ―Sudden stops, financial factors and economic collapses in Latin America: lessons from Argentina and Chile‖, NBER Working Paper Series, No. 11153.
- Edwards, S., 1998, ―Interest Rate Volatility, Capital Controls and Contagion,‖ NBER Working Paper 6756.
- Burger, John D. and Francis E. Warnock, 2004, ―Foreign Participation in Local-Currency Bond Markets,‖ International Finance Discussion Papers No. 794.
- Daniel, L., 2008, ―Foreign Investors' Participation in Emerging Market Economies’ Domestic Bond Markets,‖ Banque de France, Bulletin Digest No. 173.
- Baldacci, E., Gupta, S. and M. Amine, 2008, ―Is it (Still) Mostly Fiscal? Determinants of Sovereign Spreads in Emerging Markets (November 2008),‖ IMF Working Papers 08/259.
- Hauner, David, and Manmohan Kumar, 2006, ―Fiscal Policy and Interest Rates: How Sustainable is the New Economy?‖ IMF Working Paper, WP/06/112.
- Luengnaruemitchai, Pipat and Li Ong, 2005 ―An Anatomy of Corporate Bond Markets: Growing Pains and Knowledge Gains,‖ IMF Working Paper, 05/152.
- Kumar, Manmohan, and Tatshuyoshi Okimoto, 2009, ―Dynamics of International Integration of Government Securities’ Markets,‖ Working Paper.
- Burger, John; Francis E. Warnock; and Veronica Cacdac Warnock, 2009, ―Global Financial Stability and Local Currency Bond Markets,‖ forthcoming working paper.

### BIS, OECD, ADB, World Bank and other institutional reports
- Bank for International Settlements (BIS), 2002, ―The Development of Bond Markets in Emerging Economies‖ BIS Papers No 11, June 2002.
- Borio, C. E.V. and R. McCauley, 1996, ―The Economics of Recent Bond Yield Volatility,‖ BIS economic papers, No. 45.
- Guonan Ma & Eli Remolona & He Jianxiong (2006). ―Developing corporate bond markets in Asia: a synopsis of the Kunming discussions,‖ BIS Papers chapters, in: Bank for International Settlements (ed.), Developing Corporate Bond Markets in Asia, volume 26.
- Blommestein, H. and J. Santiso, 2007 ―New strategies for emerging domestic sovereign bond markets,‖ OECD development centre, Working Paper, No. 260, April.
- Asian Development Bank, 2008. ―Are There Ways to Broaden Investor Diversity?‖ Asia Bond Monitor. April. Manila.
- Sophastienphong, Kiatchai, Yibin Mu and Carlotta Saporito, 2008. South Asia Bond Markets: Developing Long-Term Finance for Growth, (Washington: World Bank).
- World Bank and International Monetary Fund, 2001, ―Developing Government Bond Markets: A Handbook,‖ (Washington).

### IMF publications and Global Financial Stability Report entries
- International Monetary Fund, 2005, ―Development of Corporate Bond Markets in Emerging Market Countries,‖ in the Global Financial Stability Report (September 2005).
- International Monetary Fund, 2007, ―DEVELOPING CAPITAL MARKETS IN APEC MEMBER ECONOMIES‖ Background paper for the 14th APEC Finance Ministers’ Meeting.
- International Monetary Fund, 2008, ―Development of Bond Markets in Emerging Market Countries‖ Briefing Note for the G-7 Deputies’ Meeting.
- International Monetary Fund, 2009, ―The Road to Recovery: Box 1.3‖, in the Global Financial Stability Report (October 2009).
- International Monetary Fund, 2010, ―Resolving the Crisis Legacy and Meeting New Challenges to Financial Stability,‖ in the Global Financial Stability Report (April 2010).
- Roldos, Jorge E., 2004, ―Emerging Local Bond Markets,‖ in Emerging Local Securities and Derivatives Markets, World Economic and Financial Surveys (Washington: International Monetary Fund).

*Source: _wp1088 - REFERENCES*

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