What do new forms of finance mean for EM central banks?

Bank for International Settlements

No 83 in BIS Papers from Bank for International Settlements

Abstract: Financial intermediation in emerging market economies (EMEs) has been transformed over the past decade: a higher volume of bond financing has gone hand-in-hand with a growing internationalization of financial markets and significant changes to the balance sheets of banks. The 2015 Deputy Governor meeting examined three interrelated aspects of the new forms of financial intermediation in EMEs: (a) the role of banks; (b) the role of debt securities markets; and (c) implications of recent changes in financial intermediation for monetary policy. One conclusion is that greater access of households to bank credit and of EME corporations to domestic and external bond markets is a double-edged sword. On the one hand, it has helped foster financial development, diversifying funding sources and reducing credit risk concentration. On the other hand, it has also been accompanied by increased risks and vulnerabilities - as the financial market turbulences of 2015 illustrated. Domestic bond markets now react more strongly to global forces. Larger foreign currency debt has made many companies more vulnerable to exchange rate shocks. Credit cycles have also become more pronounced. These developments raise questions about the appropriate instruments for EME monetary authorities as they seek to contain monetary and financial stability risks.

Date: 2015 Written 2015-11
ISBN: 978-92-9197-314-9
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Chapters in this book:

What do new forms of finance mean for EM central banks? - An Overview , pp 1-8

Madhusudan Mohanty

The role of banks , pp 9-40

Torsten Ehlers and Agustín Villar

The role of debt securities markets , pp 41-64

Masazumi Hattori and Elod Takats

Changing financial intermediation: implications for monetary policy transmission , pp 65-78

Emanuel Kohlscheen and Phurichai Rungcharoenkitkul

Changing patterns of financial intermediation: implications for central bank policy , pp 79-96

Central Bank of Argentina

Long-term rates and the term premium: evidence from Chile , pp 97-112

Sebastian Claro and Carola Moreno

Changes in Colombian financial markets over the past decade , pp 113-136

Pamela Cardozo and Hernando Vargas-Herrera

Changes in the Czech Republic‘s financial intermediation during the last decade , pp 137-142

Vladimír Tomšík

The rise of Hong Kong’s corporate bond market: drivers and implications , pp 143-158

David Leung, Ceara Hui, Tom Fong and Alfred Wong

Interaction between monetary and macroprudential policies in practice - a Hungarian example , pp 159-180

Ádám Balog, Orsolya Csortos, Ágnes Torös and Márton Zsigó

Indonesia: Changing patterns of financial intermediation and their implications for central bank policy , pp 181-192

Perry Warjiyo

Financial intermediation and the transmission mechanism: learning from a case study on Israeli banks , pp 193-214

Emanuel Barnea, Nadine Baudot-Trajtenberg and Ziv Naor

Changes in financial intermediation structure , pp 215-222

Huh Jinho

Changing patterns of financial intermediation and implications for central bank policy: the Malaysian perspective , pp 223-242

Bank Negara Malaysia

Is trouble brewing for EMEs? , pp 243-272

Manuel Ramos-Francia and Santiago Garcia-Verdu

Evolution of bank and non-bank corporate funding in Peru , pp 273-292

Renzo Rossini and Zenon Quispe

Increased financial intermediation in the Philippines: some implications for monetary policy , pp 293-312

Diwa C Guinigundo

The evolution of banking sectors in Central and Eastern Europe - the case of Pola , pp 313-324

Piotr Wiesiolek and Dobieslaw Tymoczko

Changing patterns of financial intermediation: Implications for central bank policy , pp 325-332

Ksenia Yudaeva

Changing patterns of financial intermediation: Implications for central bank policy , pp 333-336

Saudi Arabian Monetary Agency

Trends in financial intermediation: Implications for central bank policy , pp 337-346

Monetary Authority of Singapore

Changing patterns of financial intermediation: Implications for central bank policy , pp 347-370

South African Reserve Bank

Patterns of financial intermediation in Thailand: implications for central bank policy , pp 371-394

Bank of Thailand Monetary Policy Group

Monetary policy transmission and shifts in financial intermediation , pp 395-408

Koray Alper, Mustafa Kilinc and Mehmet Yorukoglu

Changing patterns of financial intermediation: Implications for central bank policy , pp 409-415

Central Bank of the United Arab Emirates

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