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The Romanian Municipal Bond Market and the International Financial Crisis

Valentina Vasile () and Mirela Matei ()
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Mirela Matei: Petroleum and Gas University from Ploiesti,Faculty of Economics

Authors registered in the RePEc Author Service: Mirela Panait ()

Romanian Journal of Economics, 2010, vol. 30, issue 1(39), 110-126

Abstract: In Romania, the bond market was set up later, comparatively to the equity market. This market is in a development process, but the international financial crisis has affected even the interest of investors in bonds. The secondary municipal bond market is not a very liquid market because these securities are bought from the primary market and held in portfolios by investors because these bonds have a low risk. The issue of these bonds is correlated with the financial independence and the level of decentralization of the local public authorities. The issuance of these bonds is correlated with financial independence and decentralization level specific to local public authorities. Under crisis conditions, the volatility of this market is more significant, the increasing deficits of local budgets decreasing the interest of the middle-class in investing in such financial instruments.

Keywords: bonds; crisis; stock exchange; municipalities (search for similar items in EconPapers)
JEL-codes: G01 G12 G24 H54 (search for similar items in EconPapers)
Date: 2010
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Handle: RePEc:ine:journl:v:1:y:2010:i:39:p:110-126