Download Salim Dehmej

Comments on
“What Slice of the Pie?
The Corporate Bond Market Boom in Emerging
Economies”
Discussion by Salim Dehmej
--------17-18 NOVEMBER 2016, Madrid
Topical issue
Source: FT 05/10/2016
Source: FT 01/11/2016
Source: FT - Saudi Arabia’s $17.5bn bond sale has lessons for debt market
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Summary
Aim: Evolution of NFC’ debt composition in emerging countries, in
Local & Foreign currency markets.
Results: determinants of bond market access in EMs vary with
global cyclical conditions (FC) and macro fundamentals (LC).
Are all EM concerned? market size/liquidity and entry/exist
facilities are important.
The paper also highlights some financial stability risks and come
out with policy recommendations.
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Data & Methodology
Data: 47 EMs, for the 2000–13 period.
Decomposed both into bank loans and bonds, and into local and
foreign currencies
Uses 2 econometric technics:
- Censored panel regression: Identify global and local drivers of
bond market shares
- Panel quantile regression: take into account the bond market
development (market size)
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Comments (1/5)
Is it possible to extend data to 2016 instead of 2014
(capturing recent trends: during tightening)
Financing structure: who buy bonds? If banks : not
disintermediation but market intermediation?
Is the exchange rate regime matters? Is private bond
crowding out sovereign debt?
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Comments (2/5)
Financial stability : more details on debt: short vs long term;
senior/secured? ; by rating (junk bonds?)
Source: Molteni and Umana Dajud (forthcoming)
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Comments (3/5)
Corporate debt by sector/region
Source: FSB 2015 (IMF data)
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Comments (4/5)
Is there any threshold?
Source: FSB 2015
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Comments (5/5)
Policy perspective: internal/equity financing instead of
debt (debt overhang/deleveraging)
What about ex ante Macroprudential policy (FX related
tools) and ex post capital control (CMF) measures?
Form
Separate the literature from the introduction (very long)?
Difficult to follow all regressions ->
separate robustness/sensitivity from main regressions
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