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Understanding the Use of Long-term Finance in Developing Economies

Maria Soledad Martinez Peria and Sergio Schmukler ()

No 17/96, IMF Working Papers from International Monetary Fund

Abstract: This short paper reviews recent literature on the use of long-term finance in developing economies (relative to advanced ones) to identify where long-term financing occurs, and what role different financial intermediaries and markets play in extending this type of financing. Although banks are the most important providers of credit, they do not seem to offer long-term financing. Capital markets have grown since the 1990s and can provide financing at fairly long terms. But few firms use these markets. Only some institutional investors provide funding at long-term maturities. Governments might help to expand long-term financing, although with limited policy tools.

Keywords: Bank financing; Capital markets; Developing countries; Banks; Bond markets; Financial crises; firm financing, institutional investors, issuance maturity, long-term debt, short-term debt, Globalization: Finance, General, General, Portfolio Choice, Government Policy and Regulation, General, Government Policy and Regulation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg
Date: 2017-04-26
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Handle: RePEc:imf:imfwpa:17/96