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Comments on “What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies”

Comments on “What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies”. Discussion by Salim Dehmej --------- 17-18 NOVEMBER 2016, Madrid. Topical issue. Source: FT 01/11/2016. Source: FT 05/10/2016.

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Comments on “What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies”

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  1. Comments on “What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies” Discussion by Salim Dehmej --------- 17-18 NOVEMBER 2016, Madrid

  2. Topical issue Source: FT 01/11/2016 Source: FT 05/10/2016 Source: FT - Saudi Arabia’s $17.5bn bond sale has lessons for debt market

  3. Summary Aim: Evolution of NFC’ debt composition in emerging countries, in Local & Foreign currency markets. Results: determinants of bond market access in EMs vary with global cyclical conditions (FC) and macro fundamentals (LC). Are all EM concerned? market size/liquidity and entry/exist facilities are important. The paper also highlights some financial stability risks and come out with policy recommendations.

  4. Data & Methodology • Data: 47 EMs, for the 2000–13 period. • Decomposed both into bank loans and bonds, and into local and foreign currencies • Uses 2 econometric technics: • - Censored panel regression: Identify global and local drivers of bond market shares • - Panel quantile regression: take into account the bond market development (market size)

  5. Comments (1/5) Is it possible to extend data to 2016 instead of 2014 (capturing recent trends: during tightening) Financing structure: who buy bonds? If banks : not disintermediation but market intermediation? Is the exchange rate regime matters? Is private bond crowding out sovereign debt?

  6. Comments (2/5) Financial stability : more details on debt: short vs long term; senior/secured? ; by rating (junk bonds?) Source: Molteni and Umana Dajud (forthcoming)

  7. Comments (3/5) Corporate debt by sector/region Source: FSB 2015 (IMF data)

  8. Comments (4/5) Is there any threshold? Source: FSB 2015

  9. Comments (5/5) Policy perspective: internal/equity financing instead of debt (debt overhang/deleveraging) What about ex ante Macroprudential policy (FX related tools) and ex post capital control (CMF) measures? Form Separate the literature from the introduction (very long)? Difficult to follow all regressions -> separate robustness/sensitivity from main regressions

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