## Local Currency Bond Markets Law Reform: A Methodology for Emerging Markets and Developing Economies

_IMF Working Papers, November 20, 2020_

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## Bibliographic details
- Authors: Wouter Bossu, Cory Hillier, Wolfgang Bergthaler
- Published: November 20, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513561608.001

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### Summary
- Authors: Wouter Bossu, Cory Hillier, Wolfgang Bergthaler
- Publication date: November 20, 2020
- Core objective: Outline a strategically anchored methodology to design, build and implement the legal and tax foundations for the development of local currency bond markets (LCBMs) in emerging markets and developing economies.
- Rationale:
  - Recent financial crises including the ongoing one caused by the COVID-19 pandemic have highlighted the need to strengthen public debt management in emerging markets and developing countries.
  - Deeper and more efficient domestic government debt markets—being, a key segment of the LCBM for many emerging markets and developing economies—play a key role in reducing financial vulnerability to shocks and enable governments to finance critical economic and fiscal policy measures in response to them.
  - Robust legal and regulatory frameworks are recognized as critical building blocks for the structure, development and functioning of LCBMs.

### Key findings and themes
- Importance of LCBMs:
  - Developing and strengthening LCBMs is a key policy prescription to sound public debt management.
- Role of legal and tax frameworks:
  - Legal and tax foundations are essential to address common challenges and impediments to LCBM development.
- Target outcomes:
  - Reduce financial vulnerability to shocks.
  - Enable governments to finance critical economic and fiscal policy measures.

### Methodology focus
- Aim: Provide a methodology applicable to emerging markets and developing economies to:
  - Design legal and tax frameworks.
  - Build institutional foundations.
  - Implement reforms to support LCBM development.
- Strategic anchoring: The methodology is framed to adequately address common challenges and impediments specific to LCBMs in the target economies.

### Policy implications and recommendations (as emphasized)
- Strengthen public debt management through deeper domestic government debt markets.
- Prioritize robust legal and regulatory frameworks as critical building blocks for LCBM development.
- Align legal and tax reforms with the strategic objective of reducing financial vulnerability and enabling government financing capacity during shocks.

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## Content in this bundle

- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2020/11/20/local-currency-bond-markets-law-reform-a-methodology-for-emerging-markets-and-developing-49905_