Local Currency Bond Markets Law Reform: A Methodology for Emerging Markets and Developing Economies

Wouter Bossu, Cory Hillier and Wolfgang Bergthaler

No 2020/258, IMF Working Papers from International Monetary Fund

Abstract: Recent financial crises including the ongoing one caused by the COVID-19 pandemic have consistently drawn attention to the need to strengthen the quality of public debt management in emerging markets and developing countries. Deeper and more efficient domestic government debt markets—being, a key segment of the LCBM for many emerging markets and developing economies—play a key role in reducing financial vulnerability to shocks and enable governments to finance critical economic and fiscal policy measures in response to them. Policymakers and international organizations have long recognized that developing and strengthening LCBMs is a key policy prescription to sound public debt management. Robust legal and regulatory frameworks are recognized as being critical building blocks for the structure, development and functioning of LCBMs. This Working Paper seeks to outline a strategically anchored methodology that can be applied to design, build and implement the legal and tax foundations for the development of LCBMs that would adequately address common challenges and impediments.

Keywords: local currency bond markets; development; financial stability; legal and tax frameworks; WP; repurchase agreement; dematerialized securities; securities lending; settlement system; commercial paper; capital markets; tax treatment; law framework; tax law framework; Securities; Legal support in revenue administration; Tax law; Bonds; Global (search for similar items in EconPapers)
Pages: 61
Date: 2020-11-20
New Economics Papers: this item is included in nep-cwa
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