The Role of Debt Securities Markets

Debt securities markets in emerging market economies (EMEs) have grown over the past decade. The growth was particularly strong for domestic debt securities, which have increased from around one third of EME GDP to around one half. Although international debt securities have demonstrated slower growth, bonds still overtook bank loans in international financing flows. This growth was, however, heterogeneous, reflecting economy-specific factors. While bonds bring economic benefits, especially in funding diversification, the rapid growth in debt securities markets also raises financial stability risks.Full publication: "http://ssrn.com/abstract=2692232" What Do New Forms of Finance Mean for EM Central Banks?