Bond Markets in Advanced Transition: A Synopsis of the Visegrád Bond Markets

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The authors gratefully acknowledge helpfull support from the following members of the ACE-team: Victoria Miickova and Marian Nemec (National Bank of Slovakia), Josef Mervart (Czech National Bank), Jarek Neneman (University of Lodz) and Rita Bozzai (Financial Research Ltd., Budapest). Terms of use: Documents in SummaryBond markets have to fulfil several important functions in the transition process: Through these markets capital can be channelled from domestic and foreign sources to the government and to private enterprises. Thus, an efficient bond market can help to create competition for the intermediation through the banking sector. In addition, government bonds can help to improve the macroeconomic framework through the provision of a non-inflationary instrument to finance government deficits. Behind this background, this analysis gives a synopsis of the stage of bond market development in the Visegrad countries. Apart from looking at the situation of different bond market sections, the primary and secondary markets, interest is also paid to the institutional and legal framework. Furthermore, the integration of these emerging bond markets into the international capital market is assessed. This synopsis indicates that although Visegrad bond markets have already proceeded far some shortcomings still remain. These concern among others low liquidity, an incomplete term structure of interest rates and the absence of markets for interest rate derivatives.