4/10/2013 – A new diagnostic framework to assist policy makers to develop bond markets in local currency was released today. The diagnostic framework can help analyse the state and efficiency of local currency bond markets and provide the basis for designing a strategy for market deepening with appropriate sequencing of policy action and delivery of associated technical assistance.
The diagnostic framework is presented in a new report authored jointly by the IMF, World Bank, European Bank for Reconstruction and Development, and the OECD. The report analyses the main elements necessary to deepen domestic bond markets in emerging and developing economies.
The development of a diagnostic framework was endorsed in November 2011 by the G20 to support the development of local currency bond markets in emerging markets. In the aftermath of the global financial crisis, developing local currency bond markets was seen to be essential to:
(i) increase financing options to meet emerging market needs, including for infrastructure;
(ii) prevent excessive reliance on intermediation through global financial centers;
(iii) help resolve global imbalances, by providing savings instruments for emerging market households; and
(iv) improve resilience to shocks.
The paper is the result of a collaborative effort among international financial institutions and has benefited from extensive consultation with stakeholders, including country authorities in emerging markets at various stages of deepening their local currency bond markets; such as South Africa, Turkey, and Uruguay.
For more information, journalists should contact Hans Blommestein Head of Bond Market and Public Debt Management Unit,
tel.: +33-1-45247990 (fixed) or +33628710093 (mobile).
For further information, visit: www.oecd.org/finance/public-debt
>> G20 Saint Petersburg Summit Declaration, 6 September 2013
>> G20 Action Plan to Support the Development of Local Currency Bond Markets, 15 October 2011