Publication:
The Role of Foreign Investors in Debt Market Development : Conceptual Frameworks and Policy Issues

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dc.contributor.authorLee, Jeong Yeon
dc.date.accessioned2014-08-28T15:05:38Z
dc.date.available2014-08-28T15:05:38Z
dc.date.issued2000-08
dc.description.abstractTo take full advantage of foreign investors, a host country must provide an appealing environment: a stable economic and political environment; a fair, rational, and, comprehensive legal system; a fair, reasonable, and, balanced tax program; a fair, productive, and, balanced regulatory system; and transparency in economic, financial, legislative, and regulatory systems. The country should also liberalize capital account transactions. To do so successfully, and minimize risks associated with foreign investors, capital account liberalization must be properly sequenced. The chief danger is removing most restrictions on capital account transactions, before addressing major problems in the domestic financial system, and hence risking a crisis. Typical major problems include shaky, inconsistent macroeconomic management; severe asymmetric information problems (such as inadequate accounting, auditing, and disclosure practices) in the financial, and corporate sectors; implicit government guarantees; and inadequate prudential supervision, and regulation of domestic financial markets, and institutions. Essential infrastructure must be developed if domestic debt instruments are to be opened to international portfolio investment. Developing countries should implement well-synchronized settlement, and depository arrangements. The risks from short-term debt - which could threaten financial stability - are best through sound financial management, and prudential regulation. A case could de made for additional policy measures aimed at curbing over-reliance on short-term debt. (Chile, Colombia, and Israel, for example, have adopted measures to influence the level, and composition of portfolio capital inflows). Arguably, liberalization of trade in financial services is integral to full liberalization of capital markets. Foreign firms operating in a domestic market may transfer useful technology, and know-how. Concern that hedge funds can dominate, or manipulate markets, can be dealt with through measures to strengthen supervision, regulation, and market transparency - as well as by strengthening reporting requirements for larger traders, and positions. The ability of hedge funds, and other foreign investors to take positions in domestic financial markets, could also be limited to: a) Taxing short-term capital flows (as Chile does). b) requiring banks, and brokers to raise margin, and collateral requirements. c) Limiting financial institutions; ability to provide the domestic credit needed to short the currency, and their ability to loan the securities needed to short equity, and fixed-income markets.en
dc.identifierhttp://documents.worldbank.org/curated/en/2000/08/693245/role-foreign-investors-debt-market-development-conceptual-frameworks-policy-issues
dc.identifier.doi10.1596/1813-9450-2428
dc.identifier.urihttps://hdl.handle.net/10986/19810
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 2428
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCOUNTING STANDARDS
dc.subjectAGENCY PROBLEMS
dc.subjectANNUITIES
dc.subjectARBITRAGE
dc.subjectASSET DIVERSIFICATION
dc.subjectASSET PRICES
dc.subjectASSETS
dc.subjectASYMMETRIC INFORMATION
dc.subjectAUDITING
dc.subjectBANK FOR INTERNATIONAL SETTLEMENTS
dc.subjectBANK RUNS
dc.subjectBANKING CRISES
dc.subjectBANKING SECTOR
dc.subjectBANKING SYSTEM
dc.subjectBANKING SYSTEMS
dc.subjectBANKRUPTCY
dc.subjectBANKRUPTCY PROCEDURES
dc.subjectBENCHMARK
dc.subjectBORROWING
dc.subjectBORROWING COSTS
dc.subjectBROKERS
dc.subjectBUDGET DEFICITS
dc.subjectBUSINESS CYCLES
dc.subjectCAPITAL ALLOCATION
dc.subjectCAPITAL FLOWS
dc.subjectCAPITAL MARKETS
dc.subjectCAPITAL MOBILITY
dc.subjectCAPITALIZATION
dc.subjectCENTRAL BANK
dc.subjectCONNECTED LENDING
dc.subjectCONTAGION
dc.subjectCORPORATE GOVERNANCE
dc.subjectCREDIT RISK
dc.subjectDEBT
dc.subjectDEMONSTRATION EFFECTS
dc.subjectDEPOSITS
dc.subjectDEVALUATION
dc.subjectDEVELOPED COUNTRIES
dc.subjectDISCLOSURE
dc.subjectDIVIDENDS
dc.subjectDOMESTIC INVESTMENT
dc.subjectECONOMETRIC EVIDENCE
dc.subjectECONOMIC GROWTH
dc.subjectECONOMIES OF SCALE
dc.subjectEMERGING MARKETS
dc.subjectEMPIRICAL EVIDENCE
dc.subjectEQUILIBRIUM
dc.subjectEXCESSIVE RISK
dc.subjectEXCHANGE RATE
dc.subjectFINANCIAL CRISES
dc.subjectFINANCIAL INNOVATION
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL INTEGRATION
dc.subjectFINANCIAL MANAGEMENT
dc.subjectFINANCIAL MARKET LIBERALIZATION
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SECTOR
dc.subjectFINANCIAL SERVICES
dc.subjectFINANCIAL STABILITY
dc.subjectFISCAL POLICIES
dc.subjectFIXED INCOME
dc.subjectFLOW OF CAPITAL
dc.subjectFOREIGN ASSETS
dc.subjectFOREIGN BANKS
dc.subjectFOREIGN CURRENCY
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectFOREIGN FIRMS
dc.subjectFOREIGN INVESTMENT
dc.subjectFOREIGN INVESTORS
dc.subjectFOREIGN SECURITIES
dc.subjectGAMBLING
dc.subjectGDP
dc.subjectGLOBAL CAPITAL
dc.subjectGOVERNMENT BONDS
dc.subjectGOVERNMENT SECURITIES
dc.subjectHEDGE FUNDS
dc.subjectIMPLICIT GUARANTEES
dc.subjectINFLATION
dc.subjectINFORMATION DISCLOSURE
dc.subjectINSURANCE
dc.subjectINSURANCE POLICIES
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL COMPETITION
dc.subjectINTERNATIONAL RESERVES
dc.subjectINVESTMENT BANKS
dc.subjectINVESTMENT SPENDING
dc.subjectLAWS
dc.subjectLENDER OF LAST RESORT
dc.subjectLIQUIDATION
dc.subjectLIQUIDITY
dc.subjectLITIGATION
dc.subjectLONG TERM ASSETS
dc.subjectLONG TERM LIABILITIES
dc.subjectMACROECONOMIC MANAGEMENT
dc.subjectMANDATES
dc.subjectMARKET DISCIPLINE
dc.subjectMATURITIES
dc.subjectMATURITY MATCHING
dc.subjectMONETARY POLICY
dc.subjectMORAL HAZARD
dc.subjectMORTGAGE LOANS
dc.subjectMUTUAL FUND
dc.subjectMUTUAL FUNDS
dc.subjectMUTUALFUNDS
dc.subjectNET WORTH
dc.subjectNOMINAL INTEREST RATES
dc.subjectPAYMENT SYSTEMS
dc.subjectPORTFOLIO
dc.subjectPORTFOLIO DIVERSIFICATION
dc.subjectPORTFOLIOS
dc.subjectPRODUCERS
dc.subjectPRODUCTIVITY
dc.subjectPUBLIC DEBT
dc.subjectPUBLIC POLICY
dc.subjectREDEMPTION
dc.subjectREGULATORY APPROACHES
dc.subjectREGULATORY SYSTEMS
dc.subjectRISK MANAGEMENT
dc.subjectRISK SHARING
dc.subjectSAVINGS
dc.subjectSECURITIES MARKETS
dc.subjectSTOCK MARKETS
dc.subjectTAXATION
dc.subjectTERMS OF TRADE
dc.subjectTRADERS
dc.subjectTRANSACTION COSTS
dc.subjectTRANSPARENCY
dc.subjectVALUATION
dc.subjectWTO
dc.titleThe Role of Foreign Investors in Debt Market Development : Conceptual Frameworks and Policy Issuesen
dspace.entity.typePublication
okr.crossref.titleThe Role of Foreign Investors in Debt Market Development: Conceptual Frameworks and Policy Issues
okr.date.disclosure2000-08-31
okr.date.doiregistration2025-04-10T09:28:07.382470Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2000/08/693245/role-foreign-investors-debt-market-development-conceptual-frameworks-policy-issues
okr.globalpracticeFinance and Markets
okr.guid892881468740710187
okr.identifier.doi10.1596/1813-9450-2428
okr.identifier.externaldocumentum000094946_00090705382110
okr.identifier.internaldocumentum693245
okr.identifier.reportWPS2428
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/10/13/000094946_00090705382110/Rendered/PDF/multi_page.pdfen
okr.sectorCapital Markets Development
okr.sectorFinance
okr.topicEconomic Theory and Research
okr.topicFinance and Financial Sector Development::Financial Intermediation
okr.topicBanks and Banking Reform
okr.topicEnvironmental Economics and Policies
okr.topicInternational Terrorism and Counterterrorism
okr.topicPayment Systems and Infrastructure
okr.topicFiscal and Monetary Policy
okr.unitFinance, Development Research Group
okr.volume1
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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