The common bond market for Asia: Avoiding the currency meltdown risks.

摘要

This dissertation summarizes research conducted in assessing the feasibility of various proposals to organize a common bond market for Asia as an agency to deter the recurrence of the "1997-1998 Asian financial crisis" which caused economic disarray to Indonesia, Malaysia, Philippines, South Korea, and Thailand. Several scholars have expressed opinions that had a common bond market for Asia been in existence, the financial crisis could have been avoided or at least its effects mitigated. In this study, the causes of the currency crisis and lessons learned from them which have sparked a wide-raging debate among scholars and financial analysts are extensively explored. One contributing factor that has been advanced as the core of the currency crisis is the theory of "double mismatch," which is a combination of maturity mismatch and currency mismatch. This "double mismatch" is carried out by borrowing funds in US dollars or euro on a short-term basis and lending them to borrowers in local currency on a long-term basis. However repayment to lenders is made in US dollars or the euro. This study also discussed the role of the governments and financial systems of the affected nations as a contributing factor to the financial crisis. Although from 1999 to the present various proposals to establish a common bond market for Asia have been broached by the officials of the affected nations, neither a taxonomy of the Asian Bond Market Initiative (ABMI) proposals nor an implementation model for any proposals has been formulated and published. Some critics of the ABMI have argued that by seeking to establish a regional bond market before carrying out programs essential to its success and effectiveness as a means for dealing with the "dual mismatch" problem would be ineffective. Despite the slow pace of progress to date, there are good reasons to believe that an Asian bond market will eventually exist in the foreseeable future. The common bond market for Asia is definitely needed because continued dependence on Western industrialized nations for capital will bring them to the dangers of the recurrence of the "Asian financial crisis" of 1997-1998.