Assessing Bond Market Integration in Asia

Ip-wing Yu, Laurence Fung and Chi-sang Tam
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Ip-wing Yu: Research Department, Hong Kong Monetary Authority
Laurence Fung: Research Department, Hong Kong Monetary Authority
Chi-sang Tam: Research Department, Hong Kong Monetary Authority

No 710, Working Papers from Hong Kong Monetary Authority

Abstract: Development of the local bond markets has been a top priority for financial reforms in the region after the Asian financial crisis. Various initiatives have also been taken to foster the development of the regional bond market. This paper looks into the degree of integration of sovereign (government) bond markets in Asia. It provides a survey of indicators and measures to monitor the development, measure progress and assess the state of bond market integration in the region. Our empirical results broadly show that there is only weak bond market integration in the region and very little progress has taken place since 2003. The apparent lack of progress may be due to the "local" or "idiosyncratic" factors in some Asian economies.

Keywords: Financial integration; Kalman filter; Cointegration; Synchronisation; Dynamic correlation (search for similar items in EconPapers)
JEL-codes: C13 C22 F36 G15 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2007-06
New Economics Papers: this item is included in nep-fmk and nep-sea
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:hkg:wpaper:0710

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