Journal Article

Domestic Bond Market Development: The Arirang Bond Experience in Korea

Jonathan A. Batten and Peter G. Szilagyi

in The World Bank Research Observer

Published on behalf of World Bank

Volume 22, issue 2, pages 165-195
Published in print January 2007 | ISSN: 0257-3032
Published online September 2007 | e-ISSN: 1564-6971 | DOI: http://dx.doi.org/10.1093/wbro/lkm007
Domestic Bond Market Development: The Arirang Bond Experience in Korea

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This study contrasts the development of the Republic of Korea's market for won-denominated foreign bonds (Arirang) with similar markets in the Asia-Pacific region. It discusses the problems, concerns, and key issues related to the development of this market within the broader context of domestic, regional, and global bond market development. Korea's experience provides valuable lessons for other emerging market economies also seeking to build bond markets for local and foreign issuers. The sophistication of the local bond market is not enough to make it appealing to foreign borrowers. Market development demands ensuring an enabling infrastructure and a background of macroeconomic stability, nurturing local and international demand, deregulating capital flows, and minimizing exchange restrictions.

Keywords: F34; G18

Journal Article.  11651 words.  Illustrated.

Subjects: Financial Regulation ; International Finance

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