The Mexican Financial Crisis: A Test of the Resilience of the Markets for Developing Country Securities

December 1, 1995

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Shogo Ishii, and David Andrew. The Mexican Financial Crisis: A Test of the Resilience of the Markets for Developing Country Securities, (USA: International Monetary Fund, 1995) accessed November 8, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews developments in private capital flows to developing countries since the Mexican financial crisis in December 1994. The paper points out that a strong recovery in these flows masks some significant changes in their characteristics, particularly in the type of borrowers back toward sovereigns and the currency denomination of new issues shifted away from U.S. dollars. Terms of new bond issues became significantly less favorable than before the Mexican crisis. One of the most striking developments was the sharp increase in bond placements by developing countries in deutsche mark and yen. It is shown that relatively favorable credit ratings assigned by Japanese rating agencies facilitated some developing countries to tap the yen bond market.

Subject: Bonds, Financial institutions, Financial markets, International bonds, International capital markets, Stock markets, Stocks

Keywords: Africa, Asia and Pacific, Bonds, Borrower, Deutsche mark, Developing country, Developing country borrower, Dollar-denominated issue, Europe, International bonds, International capital markets, Middle East, Right, Secondary market, Securities, Stock markets, Stocks, U.S. dollar, Western Hemisphere, WP, Yield

Publication Details

Pages:

37
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1995/132
Stock No:

WPIEA1321995
ISBN:

9781451855326
ISSN:

1018-5941

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