## The Development of Local Debt Markets in Asia

_IMF Working Papers, June 1, 2011_

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## Bibliographic details
- Authors: Mangal Goswami, Sunil Sharma
- Published: June 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455259373.001

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### Key findings on market development
- Market development in emerging Asia has been limited by hurdles confronting borrowers and lenders.
- Current and potential liquidity providers face constraints that limit market depth.
- There is insufficient support from government policies and regulations to foster deeper local debt markets.
- A shortage of financial assets suitable as underlying collateral constrains the expansion of fixed-income markets and domestic and regional investment opportunities.

### Analysis of structural challenges
- Critical size is a major issue for local debt market development.
- Fragmented national markets reduce scale, efficiency, and access for investors and issuers.
- The absence of a strong credit culture impedes the mobilization of domestic investor bases and the diversification of funding sources.
- Market infrastructure gaps (including repo market, swap market, and securities trading capabilities) constrain liquidity and market stability.

### Policy recommendations and avenues for development
- Foster a credit culture to deepen local debt markets.
- Address critical size through an integrated regional market for local currency bonds to provide greater scale, efficiency, and access.
- Strengthen government policies and regulatory frameworks to better support borrowers, lenders, and liquidity providers.
- Develop financial assets that can serve as underlying collateral to expand fixed-income markets and enable broader domestic and regional investment opportunities.

### Thematic keywords and focus areas
- Bonds; Corporate bonds; Emerging and frontier financial markets; Financial institutions; Financial markets; Securities; Securities markets.
- Emphasis on: local currency debt markets, market liquidity, market infrastructure, repo market, swap market, investor base, interest rate, market stability, regulatory framework, increase financial market integration.

*IMF Working Paper — The Development of Local Debt Markets in Asia*

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-development-of-local-debt-markets-in-asia-24904_