Editor Pick – New strategies for emerging domestic sovereign bond markets
New strategies for emerging domestic sovereign bond markets
Hans Blommestein ; Javier Santiso / OECD
“The central thesis of the paper is that risk-based public debt management and liquid domestic bond markets are important mutually reinforcing strategies for developing countries and particularly for emerging financial markets to attain: i) enhanced financial stability; and ii) a more successful participation in the global financial landscape. It is also shown that this twin strategies approach requires taking a policy-coherent macroeconomic perspective.”
“In more recent years, public debt management in emerging markets has become much more sophisticated by adopting leading practices from OECD countries, including a market-based issuance process, an integrated and risk management approach to public debt, the use of benchmarks, and an emphasis on the importance of establishing liquid secondary government bond markets.”
“The focus on a risk-based approach to debt management, has contributed to a more prudent risk profile of the government balance sheet while it has also helped more generally to improve the transparency, predictability and liquidity of domestic fixed income debt markets. As a result, an increasing number of emerging markets countries are creating the conditions for a more successful participation in the global financial system.”
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