<abstract xmlns="http://www.w3.org/1999/xhtml"><p> The Asian financial crisis marked a turning point in financial development in East Asia that brought the development of bond markets within the focus of policy-makers. This paper tracks the benefits of an advanced bond market, the current state of the East Asian corporate and government bond markets and their rapid evolution since the Asian crisis. Subsequently, a multivariate model is used to determine the endogenous economic and institutional factors that drove growth in the region’s bond markets. The following findings may be noted: (1) growth in the government bond market was driven by the monetary sterilisation efforts of East Asian central banks in order to cope with excessive liquidity, (2) the government bond market may crowd out the corporate bond market, and (3) the corporate bond market grew particularly strongly during the global financial crisis.</p></abstract>

The Asian financial crisis marked a turning point in financial development in East Asia that brought the development of bond markets within the focus of policy-makers. This paper tracks the benefits of an advanced bond market, the current state of the East Asian corporate and government bond markets and their rapid evolution since the Asian crisis. Subsequently, a multivariate model is used to determine the endogenous economic and institutional factors that drove growth in the region’s bond markets. The following findings may be noted: (1) growth in the government bond market was driven by the monetary sterilisation efforts of East Asian central banks in order to cope with excessive liquidity, (2) the government bond market may crowd out the corporate bond market, and (3) the corporate bond market grew particularly strongly during the global financial crisis.

The Theory and Empirics of Financial Development in the East Asian Bond Markets

Vienna Journal of East Asian Studies

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"The Theory and Empirics of Financial Development in the East Asian Bond Markets"}

The Asian financial crisis marked a turning point in financial development in East Asia that brought the development of bond markets within the focus of...

The Theory and Empirics of Financial Development in the East Asian Bond Markets

Published Online: Dec 05, 2018

Page range: 45 - 76

DOI: https://doi.org/10.2478/vjeas-2014-0003

Keywords
East Asia, bond market, financial development, monetary sterilisation, econometric analysis

© 2018 Thomas Kemetmüller, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The Theory and Empirics of Financial Development in the East Asian Bond Markets

Published Online: Dec 05, 2018

Page range: 45 - 76

DOI: https://doi.org/10.2478/vjeas-2014-0003

KeywordsEast Asia, bond market, financial development, monetary sterilisation, econometric analysis

© 2018 Thomas Kemetmüller, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
East Asia, bond market, financial development, monetary sterilisation, econometric analysis