The bond market is used to generate long term funds for the companies, corporations as well as the government. The Asian bond market is doing this job perfectly. It is a developing market and all the countries of the continent are coming together to make the market steady.
It was the financial crisis of 1997 which compelled the Asian countries to think about a regional bond market seriously. The countries understood that the bond market can sustain the growth rate of the continent. At the same time, it was also felt the presence of a regional bond market could have helped the countries in 1997 Asian Crisis.
In the past, there were many Asian countries that have put their profits and surplus savings in those foreign bond markets that was growing rapidly. The amount of such investment was about $2 trillion. Absence of a developed Asian bond market in the region caused such investment.
On the other hand it should also be noticed that the developing countries of Asia, that needs money for the development of the basic infrastructure invested in the foreign bond market and provided the needed support to the developed economies.
But the situation is now changing very rapidly because the countries have taken some good lesson from the financial crisis. Under the supervisory of the Asian Development Bank, a regional bond market is growing so that it can be used for investing the profit and surplus of the member countries. For the development of the Asian bond market the Central Banks of the region are coming together. The Asian countries are using the bond market of each other. Because of these initiatives, the Asian bond market is developing and gaining depth.
Since the financial crisis of 1997, the volume of the Asian bond market has become double. But still the market needs to develop their guarantee mechanism to encourage the cross border investments.
Last Updated on : 10th July 2013