ICMA has prepared a paper for policy makers about why corporate bond markets are so important for economic growth, for investors, for companies, and for governments, around the world; and why it is therefore essential that laws and regulations that affect them avoid any unintended adverse consequences that could inhibit those markets.
A round-up of the latest UK economic news, including a reminder of the key announcements in George Osborne's Budget, inflation falling to 0%, the latest unemployment figures and David Cameron's comments about his re-election.
A round-up of the latest UK economic news, including a reminder of the key announcements in George Osborne's Budget, inflation falling to 0%, the latest unemployment figures and David Cameron's comments about his re-election.
Peru: "Law Pulpín", the IDB and the APP. Traps made and what liesrubèn ramos
In this article I refer to two aspects related to the "Law promoting youth access to the labor market and social protection." Law that now everyone calls "Pulpín Law". I do not pretend to invalidate anything that young people have said about it. I must emphasize, however, that the majority is intuitive approaches. Others are the expression of old trade union or party structures using its young members to seek "dialogue" to the government and see how they fit best to continue manipulating the interests of workers and continue to vegetate. In any case, "the rebellious nature of youth" has shown an unfortunate orphans information and knowledge, both on the law and on the environment in which it is framed and context in which it is part. Two of the aspects that just want to try without pretending to exhaust the discussion.
Per Strömberg: "How can the financial system support the real economy?"Global Utmaning
A presentation held by professor Per Strömberg, Swedish House of Finanice, at the high level seminar "Towards a sustainable financial system" hosted by the Stockholm based think tank Global Challenge in cooperation with London School of Economics and The Swedish House of Finance on September 12th 2013.
Market volatility, changing regulatory requirements, increased service demands, advancement in technology and increased competition are posing challenges to build innovative solutions for interoperable and cohesive systems. This whitepaper defines the role of an advisor portal, reveals the challenges faced by the advisors, with particular focus on those providing services to High Net Worth Individuals (HNWI), explains the underlying complexitie s faced by the advisor community and lists the business processes used by advisors.
Peru: "Law Pulpín", the IDB and the APP. Traps made and what liesrubèn ramos
In this article I refer to two aspects related to the "Law promoting youth access to the labor market and social protection." Law that now everyone calls "Pulpín Law". I do not pretend to invalidate anything that young people have said about it. I must emphasize, however, that the majority is intuitive approaches. Others are the expression of old trade union or party structures using its young members to seek "dialogue" to the government and see how they fit best to continue manipulating the interests of workers and continue to vegetate. In any case, "the rebellious nature of youth" has shown an unfortunate orphans information and knowledge, both on the law and on the environment in which it is framed and context in which it is part. Two of the aspects that just want to try without pretending to exhaust the discussion.
Per Strömberg: "How can the financial system support the real economy?"Global Utmaning
A presentation held by professor Per Strömberg, Swedish House of Finanice, at the high level seminar "Towards a sustainable financial system" hosted by the Stockholm based think tank Global Challenge in cooperation with London School of Economics and The Swedish House of Finance on September 12th 2013.
Market volatility, changing regulatory requirements, increased service demands, advancement in technology and increased competition are posing challenges to build innovative solutions for interoperable and cohesive systems. This whitepaper defines the role of an advisor portal, reveals the challenges faced by the advisors, with particular focus on those providing services to High Net Worth Individuals (HNWI), explains the underlying complexitie s faced by the advisor community and lists the business processes used by advisors.
For all those interested in "Bond Markets" - my new infoposter "ECONOMICS" is now available:
- the poster gives an overview of the development of economic theory from its beginnings.
- the poster shows the historical roots of economic ideas and their application to contemporary economic policy debates.
View and order at http://www.cee-portal.at/PrestaShop
Best regards
Martin Kolmhofer
MBA 201 (BUSINESS ENVIRONMENT)
Q-1. What is public debt? Describe its role in the economy.
Q-2. What is corporate intelligence?
Q-3. Define the role of the RBI in enforcing FEMA.
Q-4. Describe the social responsibility of business.
Q-5. Explain the economic role of government in business environment.
MBA 202 (RESEARCH METHODOLOGY)
Q-1. What do you mean by research? Explain its significance in modern times.
Q-2. Explain in detail techniques involved in defining a research problem.
Q-3. What is questionnaire? What are different types of questionnaire?
Q-4. What are the precautions one should take while administering “Data Collection”.
Q-5. Write short note on methods of business forecasting.
MBA 203 (FINANCIAL MANAGEMENT)
Q-1. What is “Return on capital employees?”
Q-2. What are the factors on which risk involved in investment depends?
Q-3. What are the advantages of cash planning? How does cash budget help in planning the firms cash flows?
Q-4. Explain the various approaches for computing the cost of equity capital.
Q-5. Explain various method of financial statement analysis.
MBA 204 (CORPORATE & BUSINESS LAWS)
Q-1. Explain how a case is brought before the courts, and describe the court process.
Q-2. Describe tort law and compare it to criminal law.
Q-3. What do you understand by Corporate & Business Laws? Explain.
Q-4. What is a non-profit corporation?
Q-5. State the various classes of companies that can be formed under the act. Explain the characteristics of each.
MBA 205 (OPERATIONS RESEARCH)
Q-1. Explain characteristics and classification of queuing model.
Q-2. Explain degenerate transportation problem.
Q-3. Write at least five application areas of linear programming.
Q-4. What do you understand by modified distribution method?
Q-5. What is the role of decision making in OR. Explain its scope.
MBA 206 (MANAGERIAL EFFECTIVENESS)
Q-1. “Decision-making is a critical activity in the lives of managers”. Define
Q-2. What are the requirements of an effective control system?
Q-3. Risk can always be associated with loss. Analyse the statement.
Q-4. Time management is more than just managing our time. Comment.
Q-5. Managers should concentrate on results, not on being busy. Describe.
Corporate Governance Reforms Post Global Financial CrisisSanjay Uppal
Every financial crisis is typically followed by introduction of new regulations. However, the avalanche of new policies, guidance & regulations in recent years following the onset of the financial crisis will lead to unprecedented transformation in the governance of banks and financial services organizations.
The presentation analyses key events leading up to this crisis, changes in corporate governance sweeping across, US, UK & Europe and the challeges that organiations, regulators, governments and other stakeholder face in this period of transformation.
Fiduciary or paper money is issued by the Central Bank on the basis of
computation of estimated demand for cash. Monetary policy guides the Central
Bank’s supply of money in order to achieve the objectives of price stability (or low
inflation rate), full employment, and growth in aggregate income.
In the ICMA Quarterly Report for the First Quarter of 2014, the Foreword by Martin Scheck looks at the task facing ICMA in the year ahead. The Quarterly Assessment is on European Banking Union and capital markets. We review new regulatory developments in response to the crisis, both at global and European level; and we consider the impact of new regulations on market practice in the repo and ECP markets; the primary and secondary markets; asset management; and the market infrastructure. There is also an introduction by Lee Goss on ICMA's Sovereign Bond Consultation Paper.
ICMA and the University of Reading work together as "ICMA Executive Education" under an operating agreement. Covering technical product / markets and operations, the professional qualifications and training programmes are delivered in major financial centres aimed at market practitioners in the financial markets.
For further information about ICMA Executive Education, please contact David Senior david.senior@icmagroup.org or on +44 (0)20 7213 0329.
ICMA sustains and supports its members’ business by promoting the development and efficient functioning of the international capital markets.
If you have any queries or would like to discuss the benefits of ICMA membership, please contact:
Sanaa Clausse
Director, Business Development, Membership
Email: sanaa.clausse@icmagroup.org
Direct line: +44 20 7213 0325
http://www.icmagroup.org/membership/about-membership/benefits-of-membership/
ICMA is a trade institution that represents all categories of market users: issuers, intermediaries and investors, both wholesale and retail.
Membership continues to grow and we currently have more than 440 members based in 53 countries. Full list of the ICMA members can be accessed via this link: http://www.icmagroup.org/membership/about-membership/List-of-principal-delegates/
More from International Capital Market Association (ICMA) (7)
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
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Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
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3. 3
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
This paper by the International Capital
Market Association (ICMA) is about
why corporate bond markets are
so important for economic growth,
for investors, for companies, and for
governments, around the world; and
why it is therefore essential that laws and
regulations that affect them avoid any
unintended adverse consequences that
could inhibit those markets.
Corporate bonds - transferable debt
securities issued by companies - are
one of a range of means, alongside
equity share capital, bank lending, and
other methods, by which companies
fund their business needs and their
expansion. (see section B(i) below)
Corporate bonds have long been
a particularly stable and reliable
source of term finance for non-
financial-services companies in
the ‘real economy’. The importance
of corporate bonds for issuing
companies has grown, particularly
as bank lending has been squeezed,
and is likely to continue to grow. Bonds
are a pivotal mechanism for creating
and sustaining enterprise, business
investment, and economic growth. (see
section B(ii) below)
Corporate bonds offer a range of
advantages to investors, in particular
for individuals and funds that need stable
and predictable income and retention
of capital value, for example to save for
retirement. They are an important means
to stimulate private investment and limit
citizens’ dependence on the public sector.
(see section C below)
Primary and secondary markets in
corporate bonds link corporate
issuers and investors efficiently
around the world. Domestic and
international corporate bond markets
provide for diverse needs. Domestic
markets cater in particular for smaller,
growing companies, and domestic
investors. International markets - the
constituency of ICMA and the prime focus
of this paper - enable large companies
and conglomerates to draw on global
pools of capital, including those which
represent the savings and pensions
of individuals, for major development
projects; and they enable institutional
investors to obtain well diversified and
consistent returns. The existence of
different markets helps today’s start-
ups and smaller enterprises grow into
tomorrow’s major companies, by helping
them to generate wealth while graduating
smoothly into more sophisticated and
international financial and investment
environments. (see section D below)
Corporate bond markets are also
important to governments to help meet
the urgent global public policy challenges
presented by ageing populations, and
the need to maintain growth whilst
remedying the imbalances that led to
the 2008 market turmoil. They help limit
government indebtedness, whilst offering
investors an alternative to government
bonds. (see section E below)
Summary
4. 4
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
In general, wholesale corporate bond
markets have worked well, but retail
investment in corporate bonds has
been more constrained. We need to
enable wholesale markets to meet
investors’ and companies’ needs even
better, and to build on the success of
wholesale corporate bond markets by
encouraging more retail involvement.
This is a task for both the markets
themselves, and for the authorities.
Markets, legislators, and regulators need
to work together to provide the optimal
environment for corporate issuers of
bonds, and investors in corporate bonds,
to thrive. (see sections A and F below)
Good conduct in these markets is vital. So
is good regulation of them. Intermediary
firms - ICMA’s members - are subject to
ICMA standards of good practice, and to
applicable national laws and regulations.
Rules, whether promulgated by industry
bodies or imposed by the authorities,
can have beneficial or benign or harmful
effects. Sometimes good intentions are
thwarted by unintended consequences.
It is easy, for markets as well as the
authorities, to get things wrong. There
are widely expressed concerns, for
example, that current legislative proposals
implementing the Third Basel Accord,
introducing Financial Transaction Taxes,
regulating Short Selling, and updating
the regulation of European Markets in
Financial Instruments, will damage liquidity
in the secondary market, with consequent
harm to the primary market. We think
it is important for all interested
parties: legislators, regulators,
market intermediaries, and market
users, to work together, with a better
dialogue at an early stage of policy
development, to help the authorities
understand the markets and the possible
effect on them of different measures, and
to enable the markets to understand the
authorities’ policy intentions and advise on
the best technical ways of meeting them.
(see section F below)
Everyone has a common interest in
corporate bond markets that work well
for the private and public good. This
is important for the authorities and for
market participants because if we do not
get it right, enterprises and citizens - who
are both taxpayers and customers of
the market - will suffer. The authorities,
and reputable firms, understand the
need for user-oriented regulation and
market conduct. But there are people
who do not. That is why we are keen
to work together with legislators and
regulators to discuss public policy
needs in a technically neutral way: to
promote good regulation and prevent
malpractice, but to ensure that
avoidable and unintended problems
are avoided. (see section F below)
5. 5
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
A. Introduction
(i) Purpose of this paper
Corporate bonds have long been
a stable source of finance for
companies, and so for economic
growth.
Amongst a range of financing methods, bonds - transferable debt securities - have
been an extremely important, reliable, and cost effective source of financing for
companies around the world for decades. The market disruptions of 2008 and
subsequent years underlined the critical role they play in transmitting finance around
the world to enterprises in the real economy, generating growth, employment, and
prosperity. Bond markets for non-financial-services corporates are growing. They have
increased in importance since 2007 (Dealogic statistics, Graph 8: $600 billion issued in
2007; $1.2 trillion in 2011; $1.8 trillion in 2012) as bank lending has declined (Graph 10:
$4.5 trillion in 2007; $3.5 trillion in 2011; $3 trillion in 2012). They are expected to be a
substantially more important tool for the economy going forward.
We need to build on the success of
wholesale corporate bond markets,
and encourage more retail
involvement.
ICMA works with market users and authorities worldwide to foster and develop the
understanding of the cross border bond market, of which the corporate sector is an
important component. Without going into great technical detail, this paper aims to help
policy makers to understand the critical role played by this bond market sector; how
it serves the needs of the companies and investors that use this market; how it helps
achieve broader economic and public policy objectives; and the features that need to
be safeguarded when shaping policy so as to support its role and to avoid unintended
side effects. Some parts of the market work well, but others are less well developed.
For example, despite the aim of the EU’s 1999 Financial Services Action Plan, Europe’s
retail market in corporate bonds remains much smaller than the United States’. In
Europe it is still easier to buy a share than a corporate bond, even though bonds are in
many ways less risky. This paper considers how corporate bond issuance helps provide
strength and stability to companies, investors, and economies; and why we need to
encourage it.
(ii) Scope of this paper - the corporate bond market
and its relation to other funding and investment
sources
This paper is about corporate
bonds - transferable debt
securities issued by companies.
In this paper we use the term ‘corporate bonds’ to refer to transferable debt securities
issued by companies, as distinct from public sector debt, and from non-negotiable
debt such as syndicated loans and bank loans. We discuss corporate bonds issued
by non-financial-services corporates, distinguishing them from bonds issued by banks.
There is also an important distinction between the lending for a term in corporate bond
markets, and the maturity transformation function of banks that use short-term deposits
from retail customers to support their lending. We are not advocating that greater retail
participation in corporate bond markets should compete with or substitute for banks’
deposit-taking function.
6. 6
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
Corporate bonds are one means of
financing among several.
The corporate bond market is just one sector, albeit a vital one, of the wider market in
capital. As well as sovereign and supranational borrowers, a range of participants in
the economy, from SMEs to multinational conglomerates, and financial institutions of all
sorts, compete to borrow investors’ funds to put them to good economic use. For the
corporate sector, bonds are one component in the mix of funding methods which also
includes equity capital and retained earnings, bank loans, syndicated loans, and other
forms of borrowing.
Domestic and international
corporate bond markets cater for
diverse needs.
Within the corporate bond sector, particular segments play crucial roles. International
markets, together with the domestic markets, provide the additional capacity and
the international access needed to ensure that capital flows freely to those who can
use it. Domestic lending and corporate bond markets cater for corporate issuers and
investors who do not want foreign exchange risk. But domestic markets are often
not big enough for large companies and multinationals seeking large sums for major
business development projects, whose needs can be met by the much larger pool of
investors in the international corporate bond markets. And domestic markets cannot
cater for foreign currency requirements of multinationals, who wish to match their
funding currency with that in which they incur expenditure. ICMA’s constituency is the
international markets, which are therefore the focus of this paper.
Wholesale corporate bond markets
have worked well, but retail
investment has been constrained.
In both domestic and international markets, there are wholesale and retail segments.
On the whole, the wholesale corporate bond markets, where experienced professionals
participate without the need for heavy regulation, have performed satisfactorily. We
should foster the success of wholesale corporate bond markets and make sure policy
and regulation does not needlessly constrain them. However the retail markets, where
the greatest scope for growth in investor participation and economic benefit lies,
have developed less well. Business conduct regulation is necessary to encourage
and protect participation by ordinary investors. But retail markets need significantly
more encouragement if increasing demand from investors is to be met with adequate
supply. The distinction between wholesale and retail markets is not a straightforward
dichotomy. For example, an important policy choice is whether retail investment in
corporate bonds is to be enabled directly, or channelled through fund management
intermediaries which participate in the wholesale market. While protecting retail
investors, we need to make sure that professional investors are not constrained from
continuing to fulfil and take responsibility for their professional decision-making.
Bond funding of financial services
companies also greatly benefits the
economy.
The scope of this paper is primarily non-financial corporates, but it is important to note
that the corporate bond market also includes banks, insurers and other companies in
the financial sector. Though it has declined since 2007/8 (Dealogic statistics, Graph 8:
$1.8 trillion in 2007; $1.4 trillion in 2012), the bond financing of financial institutions also
greatly benefits the real economy and can help to finance the recovery, enabling banks
to fund trade finance, project finance, consumer credit, syndicated lending, mortgages
through covered bonds, and other services which indirectly finance the real economy.
7. 7
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
B. Corporate issuers
Corporate bonds are an
important, and growing, source
of finance for companies in the
real economy.
Non-financial corporates have been, and will continue to be, the main engines of
sustainable growth in the real economy in the medium and longer term. Corporate
bonds are an important and growing source of finance for them.
(i) The position of bonds within the
corporate funding structure
The main characteristics of
corporate bonds vis-à-vis other
funding methods:
Companies typically use a mix of sources of funding to finance their growth and
business development. Some is self-funded from retained cash. External sources
of funding include long and short term bank loans, syndicated loans by a syndicate
of banks and perhaps institutional investors, trade finance, short term (less than one
year) capital market debt, corporate bonds, equity share capital, and other forms
of hybrid capital.
ranking in insolvency; Where corporate bonds rank in the capital structure of a company depends on the
specific terms of the issue. Secured debt is typically repaid, on the insolvency of the
issuer, out of the proceeds of sale of the security and therefore ahead of unsecured
debt, and both are paid ahead of equity.
cash flows; Corporate bonds provide predictable cash flows for both issuers and investors:
payment of capital at issue; regular payments of interest; and return of capital
at maturity. Secondary market prices fluctuate according to general interest rate
expectations and the creditworthiness of the issuer. Bond finance is generally cheaper
and less risky for companies than equity finance, where dividend payments depend
on uncertain profitability, dividend expectations drive market valuations, and so
investors demand greater returns to compensate.
tailoring as the company grows. Companies’ choice between bank and bond debt financing is typically influenced by
the company’s size, the state of market development, and the availability and relative
costs of different forms of finance. SMEs typically seek bank or tailored funding, or
tap the syndicated loan market. As they grow they may issue bonds, initially in their
domestic bond market, and in the international markets as their needs exceed the
investor capacity of the domestic market, or as the international nature of their business
demands better management of foreign exchange or other risks. The stages at which
this progression takes place may vary between countries depending on the level of
development of their bond markets. Some emerging markets remain heavily dependent
on bank finance. Larger and more developed markets, particularly in the United States
and increasingly in the European Union, have mature domestic bond markets and
substantial international activity. Dealogic statistics (Graph 1) suggest that the worldwide
volume of international bonds has overtaken that of domestic bonds since 2008.
8. 8
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(ii) Advantages to companies of bond funding
Corporate bonds provide
companies with stable funding;
Corporate bond markets benefit issuing companies by providing secure, stable and
flexible funding for their enterprise, innovation, technological development, economic
growth, trade, employment, and wealth creation. Investors (often insurance companies
or pension funds who need to finance long-term cash flow commitments on behalf
of retail investors) typically buy to hold to maturity. Secondary market turnover is
significantly lower than in equity markets.
lower cost of capital; Corporate bonds compete with other sources of capital, such as equity or commercial
bank lenders, exerting downward pressure on companies’ costs of funding. There is a
continuing need to reduce the cost of issuance. But disintermediation between issuers
and investors and a high degree of competition between the underwriters and brokers
who provide support services mean that corporate bond markets help issuers minimise
their cost of capital. This allows efficient allocation of investor funds to corporate
enterprise, maximising economic benefit.
alternatives to bank finance; Bond funding reduces companies’ reliance on banks, whose ability to lend is from time
to time stressed - for example, in the years following the 2007/8 financial turmoil, by
reformed prudential regulation, and by banks’ need to deleverage their balance sheets
in response to the Third Basel Accord. Deleveraging may have a disproportionately
large impact on the real economy where banks have been most prominent in debt
financing, unless corporate bond issuance can take up the slack (Dealogic statistics,
Graph 2: in Europe, Middle East, and Africa, corporate loans declined from $1.4
trillion in 2007 to $600 billion in 2011 and $400 billion in 2012). Bond funding is in any
case important when growing companies’ finance needs exceed the capacity of their
relationship banks, so that they must seek a broader and possibly international investor
base. It also functions as a ‘spare tyre’, enabling continuation of financing even when
bank lending and other sources of finance are not available.
cost saving through
disintermediation;
Non-financial-services companies are in many cases now regarded in the market as
being as good a credit risk as banks, and in some cases better. Before 2007/8, banks
could borrow more cheaply than corporates, and lend on. Since 2007/8, a decline in
market confidence in banks, deleveraging, and new capital regulation has reversed the
position, so it is no longer so commercially viable for banks to intermediate (Bloomberg
statistics, Graph 12, and Deutsche Bank research, 31st January 2013). Corporates
are well placed to attract funds for the longer term from institutional and retail investors
directly, through the bond market. There may well be a long-term shift towards a greater
proportion of market-based funding and bank disintermediation.
a means to ‘term out’ from bank
lending;
The existence of developed bond markets does however facilitate the bank loan
market, where it is often important for corporates to have bank facilities for a temporary
period, and banks will lend in the knowledge that the debt will be ‘termed out’ in the
debt capital markets at some future stage and the bank will be repaid.
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a range of instruments and
markets for growing business
needs;
Bond markets offer a range of types of instruments and markets to cater for
companies’ needs as they grow, providing a mechanism for expanding SMEs
to graduate from domestic markets into international bond markets.
project-tailored funding; Bond markets offer flexible funding of ongoing business needs and development
projects (Dealogic statistics, Graph 9, suggest only minimal use of bond proceeds
to fund mergers and acquisitions), as companies make a succession of bond issues
to coincide with budgeted cash flows.
beneficial tax treatment; Governments typically recognise and encourage the economic importance of bond
funding through favourable corporate tax treatment of bond interest.
matching of cash flows; Bonds have a fixed investment term, determined at the choice of the company,
enabling it to match a bond’s maturity with expected business cash flows. Bonds can
thus avoid maturity mismatches in cash flows more efficiently than is possible through
bank loans, and minimise the economic risks of ‘maturity transformation’ - the risk of
mismatch in the timing of flows of money resulting from short-term deposits being used
to make long-term loans. By providing a fixed amount of capital for a fixed period on
terms tailored to their needs, bonds offer companies flexible and targeted funding by
comparison with equity.
efficient use of working capital; Well-functioning corporate bond markets facilitate efficient use of working capital,
helping to avoid the need (as occurred in the aftermath of the 2008 financial turmoil) for
companies to hoard cash on their own balance sheets because of fears that stressed
banks or frozen capital markets may not be able to meet their future funding needs.
efficient exchange risk
management;
International corporate bond markets provide access to a range of different currencies,
helping companies to avoid exchange rate risk for foreign projects and international
trade. For example, if source materials for an infrastructure project are needed from a
particular country, an international bond issue in that country’s currency can work better
than a domestic bond issue which would require the additional risk of further foreign
exchange transactions to guard against currency movements. Where the funds are
required in the borrower’s own currency, it is often more cost-effective for companies
to borrow in a foreign currency and manage the exchange rate risk through derivative
markets.
access to an international
investor base;
International corporate bond markets enable issuers to access a global pool of
investors’ savings: they are not restricted to domestic sources, as bank loans tend
to be. This internationality is essential for the scale of funding and foreign exchange
management needed by international conglomerates. It is also a vital source of
international funding for developing the economies of emerging countries. And it gives
corporates in the developed world access to new and growing pools of investment
in Asia, South America, and elsewhere.
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encouragement of high
standards of transparency and
corporate governance.
By virtue of the information demanded by institutional investors, corporate bond
funding encourages higher standards of corporate disclosure and transparency, and
promotes consistent high-quality international corporate governance standards. The
corporate bond market is more transparent and less volatile than the funding provided
by alternative investment vehicles such as hedge funds, which may increasingly be
competing to fill the gap left by the shrinkage of bank lending.
C. Investors in
corporate bonds
Corporate bonds offer a range of
advantages for investors.
A range of different sources of finance from around the world seek to invest in
companies through international corporate bond markets. The switch in investor
appetite from shares to interest-generating assets, so far focused in some jurisdictions
such as the EU on government bonds, should be allowed to extend also to corporate
bonds. While the result would be more competition between public and private sectors
for bond investment, we believe that improved ability for investors to finance private
enterprise would provide an overall economic benefit.
(i) Landscape of investors now and in future
The investor base for corporate
bonds...
The range of investors includes individual retail investors, individuals investing
collectively through pension funds and other managed funds, institutional, corporate,
and sovereign wealth investors. Investors’ needs vary depending on their risk appetite
and future cash flow needs. Corporate bond markets cater in particular for investors not
seeking to make returns from dividend growth or increases in volatile capital valuations,
but instead seeking consistent and reasonably reliable cash flows and security of
invested capital. There is particular scope for greater investment in corporate bonds
by retail and collective investment funds that need to match inward cash flows with
payment obligations, in particular in those markets where bank deposits, government
bonds, and equity shares have historically dominated savings and investment.
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...is likely to grow given current
economic and demographic
trends.
In the developed world more people with increasing life expectancy will need to save
for old age in order to fund their long-term financing requirements. Demographic trends
in the developed world make it essential for investors to save appropriately for lifetime
financing needs and to reduce reliance on state pensions. To do so, individual investors,
pension funds, and life insurers need access to suitable debt products to build
predictable, safe, and relevant streams of income to meet their liabilities over both the
short and the very long term. For the defined benefit pension schemes which wish to
move out of equities in order to provide a match for their long-term liabilities, but which
find (as for example in the UK) that the supply of index-linked government bonds is too
small to match demand (Towers Watson’s 16th October 2012 research suggests a long-
term shortage of supply of UK index-linked gilts in the next few decades), corporate
bonds would provide an additional investment outlet to fill the gap. The same problem,
and the same solution, may also apply in the case of retail investors who wish to invest
directly. As the affordability and relative importance of defined benefit pensions declines,
corporate bonds offer a transparent and relatively secure and diversified element of
the funded pension investment mix for retail investors. Decent savings products in turn
enhance investors’ wealth and give them the confidence to spend.
(ii) Advantages of corporate bond investment
Corporate bonds offer investors
a stable form of investment
Corporate bonds offer investors relatively secure term investment and predictable cash
flow - regular income payments through the life of the bond, together with the return
of the initial capital at maturity, or the early realisation of market value at sale in the
secondary market if the investor’s cash flow needs change. A bond permits, through
its transferable nature, realisation of investment. However, if retail investors need such
a facility, regulators will need to facilitate liquidity, for example through market making
arrangements. Bonds offer relatively secure real returns, potentially higher than from
bank deposits, but with more predictable investment income and capital security than
is available with equities. As such they assist efficient investment of savings, particularly
for investors needing to generate income.
with good information and basis
for valuation;
Corporate bond issuance with its requirement for a prospectus and institutional
investors’ demand for exchange listing promotes greater availability of information for
investors and informed assessment of credit risk. The secondary markets provide a key
valuation measure for investment returns.
diversification from other forms of loan
investment;
Corporate bonds facilitate diversification from other types of investment - public sector
bonds, bank deposits, equities. At a time when many governments are trying to limit or
reduce public borrowing, corporate bonds offer investors who have previously invested
in public sector bonds an alternative means of investing through lending, either directly
or by pooling through institutional investors, that would not otherwise be available to
them. While some institutional investors do participate in the syndicated loan market by
taking participations in loans made by banks, many do not because such investments
are difficult to liquidate in case of need: so the bond markets offer a better mechanism
for investment through lending for them too.
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international diversification; International corporate bond markets facilitate diversification of investment between
currencies and countries in different stages of the economic cycle. They enable
investors to earn better and more diversified returns by accessing a global pool of
investment opportunities.
good matching to cash flow needs. The range, number, and frequency of corporate bond issues facilitates diversification
and tailoring of maturity, credit quality, interest rate, and currency risk, enabling a close
match to investors’ needs and risk appetite. They offer institutional investors flexibility
and the ability to time flows of funds at maturity to match their payment obligations.
D. Corporate bond markets
- the mechanism that
links corporate issuers
and investors
Primary and secondary markets
link corporate issuers and investors
efficiently around the world, and fulfil
important economic functions.
The purpose of financial markets is to bring together investors seeking to provide funds,
and economic actors seeking to use them, matching them in ways that maximise the
benefit for both, and achieve broader economic and public goals. Corporate bond
markets provide a very efficient, flexible, and safe mechanism to connect investors
across the world with companies in the worldwide real economy who require funding.
They allocate growing private savings pools to productive investments; provide finance
to companies needing to expand; encourage broader ownership of productive assets;
and provide facilities for competitive transfer and transfer pricing of capital resources.
Their characteristics and dynamics
differ markedly from other markets.
Corporate bonds differ from other markets, such as equities, in specific ways.
Companies typically have very few classes of equity, but many different issues of bonds
with different terms and maturities (for example, in 2009, some 7,000 shares were
admitted to trading on EU markets, whereas there were 150,000 debt securities in
issue (Xtrakter statistics). This pattern reflects companies’ typical use of bonds to raise
funds for particular time-limited investment projects or business needs.
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They provide a continuum of
services for different types of
company.
The international corporate bond market caters for larger and multinational companies
the scale or international character of whose markets requires cross-border
participation. Typically companies may graduate from domestic to international markets
as they grow. International markets thus form a key part of a continuum of corporate
lending markets that facilitates the emergence of smaller companies into international
expansion and prominence.
Primary issuance is the dominant
market.
Most of the trading activity in corporate bonds takes place in the primary market at
issuance, or shortly thereafter. Investment firm intermediaries help the issuing company
to structure the issue to match its finance needs and investor demand and minimise the
frictional costs of intermediation; they also underwrite the issue and take on the risk of
placing it with investors, providing the company with immediate security of funding.
Trading in secondary markets is
typically infrequent and in large
size. Market makers play an
important role.
For issuing companies the term of the bond is fixed. But investors who buy at issue can
sell the bonds, which are marketable securities, in the secondary market if they need
rapid access to their money. In these circumstances it is the market purchaser of the
bond that reimburses funds to the initial investor, not (as in the case of bank deposits)
the borrower. Secondary corporate bond markets are characterised by much larger and
fewer trades than equity markets. This means that market makers have a particularly
important function to provide liquidity on demand to investors needing to sell. Average
bond trade size is in the region of €1 to 2 million, with many trades above €5 million;
average equity trade sizes are typically 100 times smaller (Xtrakter statistics). Unlike
equities, in which trading takes place mostly on stock exchanges and other multilateral
trading facilities, most secondary market trading in the international bond market takes
place bilaterally over the counter (OTC). Nevertheless the transparency requirements
of listing on exchanges provide the information needed for informed valuation. Most
trading activity is concentrated at or shortly after issue. This is because, whereas
investors often buy and sell shares frequently in response to movements in prices and
dividend expectations, they typically hold bonds to maturity in order to fund expected
future cash flows. Only about 2% of bond issues trade once a day or more (Xtrakter
statistics).
Confidence is sustained by
consistent documentation and
market processes.
Standardised documentation and issue processes, with high levels of transparency and
regulation, have contributed to an effective and efficient corporate bond market in which
participants have confidence and where standards are high. Transparency leads to
efficient pricing and transfer pricing of capital resources, promotion of high standards of
corporate conduct, and encouragement of credit. While liquidity in the secondary bond
market suffered in the aftermath of the 2008 financial turmoil, corporate bond markets
have continued to function.
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E. Why we need to
encourage corporate bond
funding and markets
Corporate bond markets can
serve economic needs while
helping meet a range of urgent
global public policy challenges.
Vibrant corporate bond markets have numerous benefits for companies, investors,
economies, and governments, and can help meet a range of urgent global public policy
challenges.
They bring substantial economic
benefit;
As IOSCO and the World Bank recognise, corporate bond markets for non-financial
companies have intrinsic economic benefits to recommend them. They minimise
the friction and cost of intermediation between issuers and investors. They optimise
management of cash flow and currency mismatches between issuers and investors.
They promote efficient diversification and allocation of available funds in the economy
to the most productive uses.
taking the strain off public
sources of funding;
In current uncertain times, corporate bond markets harness capital and enterprise in an
efficient way that has the potential, with returning confidence, to take strain off public
sources of funding. They ease pressure on public funding by growing the private sector.
They fulfil key policy objectives of yielding investors income and long-term value, and
providing long-term economic sources of funding for issuers.
efficiently channelling new
worldwide sources of finance;
They provide an effective means by which new sources of finance - including the
savings of emerging economies, the expected increase in private savings resulting from
public sector retrenchment, and the expected increase in savings and private pension
provision for ageing populations - can be invested most productively to support the real
economy, promote worldwide prosperity, and boost growth.
easing pressure on bank lending; They ease pressure on bank lending, particularly longer-term lending, and allow a wider
range of corporate credits to access investment markets and seek finance than the
banks or government agencies could provide.
substituting for lending capacity
lost in the recent financial crisis;
They replace lending capacity that has evaporated as a result of deleveraging by and
declining market confidence in banks. They offer an additional funding mechanism for
companies, providing additional capacity if they have a significant need, and continuing
finance if bank funding is not available.
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promoting investor vigilance. They promote broader investor interest in, and vigilant credit assessment of, productive
corporate wealth creation.
enhancing wealth; They enhance wealth from secure investment, potentially leading to higher spending.
promoting stability; They promote stability in times of economic stress, reducing reliance on and exposure
to the banking sector in case of future shocks.
reducing vulnerability to crises; They reduce vulnerability of savers, investors, and economies to bank collapse.
knitting together
international investment;
They can integrate international markets to reduce structural imbalances in stable ways,
promoting globally consistent productive investment and risk management and helping
to maintain international solidarity and global growth at a time when other economic
and political pressures may tend towards isolationism or protectionism.
funding essential economic
activity;
They contribute predominantly to funding of either ongoing general purpose business
needs, or specific projects for innovation, investment, or growth by companies.
and funding social needs. By providing funding for housing associations, universities, transport networks, and
other institutions that provide social benefits, corporate bond markets also directly
benefit public policy objectives.
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Economic Importance of the Corporate
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F. The impact of regulation,
taxation, and other public
policy issues on the
corporate bond market
Public policy, laws, and
regulation need to be well
adapted to the economic
function of corporate bond
markets, and not unintentionally
inhibit them...
The corporate bond market will be affected by worldwide regulatory reform, and by
other public policy initiatives that impinge on all financial markets. Policy, legislative,
regulatory, and fiscal developments need to be well adapted to support the vital
functions in the real economy that the corporate bond markets (both domestic and
international) perform: raising money for vital projects that the equity markets or bank
loans might be unable to fund as effectively; and allowing institutional and individual
investors to meet continuing liabilities with consistent and regular income streams.
Financial market policy as a whole must not unintentionally inhibit bond markets,
and must achieve the optimal interaction between investors and issuers.
...to support a broadening of the
corporate bond market...
Historical examples show how regulation, legislation, and other aspects of public policy
can either encourage corporate bond markets to flourish, or inhibit them. At present,
access to the bond markets tends to be limited to larger companies, primarily because
of the high cost of issuance. But the corporate bond market is broadening out; the
range of issuers who now have access to it has increased, and can reasonably be
expected to increase further. The costs surrounding the issuance process need to
come down in order for more companies to consider this as a viable route to funding.
It is important that policy and regulation supports these companies’ ability to access
the bond markets at reasonable cost.
...and to be reviewed to ensure
that the overall framework of
control is well adapted to
companies’ and investors’ needs.
In addition to giving attention to the effect of specific new regulatory and policy
initiatives, there may be a need for a thorough review of the overall legal and regulatory
framework as it has emerged from recent regulatory reform to ensure that public policy
and regulation enable markets, including the international corporate bond markets, to
optimise interactions between issuers seeking funding and investors providing funds.
It is important to check that the post-2007/8 landscape of law, regulation, taxation,
and other controls and constraints on the market provides a diversity of policy treatment
that fosters different products and market sectors, the economic functions they fulfil,
and the issuers and investors they serve. Recognising the importance of domestic
bond markets, particularly for retail investors and SMEs, it is important to ensure that
the policy mix also allows for issuer and investor participation in international markets,
to maximise choice and opportunities, and to ensure that incentives to encourage or
discourage investment in different sectors are economically optimal.
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It will be important also to
consider other non-bank markets
in lending.
As well as the international bond markets, which mainly serve large and established
companies, it may also be important to consider how other evolving non-bank markets
in lending, involving more direct interaction between issuers and investors - such as
retail bond markets, private placements, and peer-to-peer lending - can improve access
to funding by SMEs, which are likely to be a particularly important engine of both
market and economic growth in the short term; and how best retail investors can be
assisted to meet their need for increased saving through corporate bond investment.
History shows that some
regulatory initiatives have
worked well…
Examples of successful regulatory policy focus occur mainly in the wholesale markets,
where, for instance, the EU conduct of business rules cater for the needs and
professionalism of institutional investors by treating them as eligible counterparties
under the EU Markets in Financial Instruments Directive (although they can elect not to
be), meaning they are not overburdened by consumer protection requirements. Equally,
institutional investors are qualified investors for the purposes of the EU Prospectus
Directive and therefore outside its scope. This approach is a major reason why the EU
institutional market has developed as it has. Further improvement in these markets
needs to focus on such matters as reductions in the costs of issuance for companies,
and removal of requirements (statutory or otherwise) for institutional investors to invest
in bonds admitted to the regulated markets, which brings the bonds within the listing
and prospectus regimes and adds to cost as explained below.
while others have had
unintended harmful
consequences.
Examples of policy mistakes of the type we need either to reverse or avoid in future,
often arising from domestically-oriented legislation that does not fully consider the
international and global consequences, include:
(a) The deadening effect of consumer protection regulation in retail markets. For
example, under the directives that were replaced by the EU Prospectus Directive (the
Public Offer Directive and the Consolidated Admissions and Reporting Directive),
translation requirements, local tax disclosure in prospectuses, lengthy prospectuses
and short form summaries that are not well adapted to the information needs of retail
investors, and draconian liability regimes all tend to drive issuing companies away from
retail offers and back to wholesale markets. This inhibition of retail involvement was (and
to a large extent, despite the Prospectus Directive, remains) very unfortunate, given that
this is the area where, given the demographic changes that we are undergoing, there
are likely to be huge increased savings looking for a sound home, as the state sector
in many countries seeks to transfer pension and old age provision responsibilities to
private actors. So policy and regulatory changes are essential if those savings are
to be channelled into the real economy and if the state is to succeed in its ambition
to shift the burden.
(b) The US Interest Equalisation Tax of the 1960s and 1970s, intended to improve the
US’s balance of payments and encourage domestic investment by taxing investment
in foreign securities, is a well-known example of the unintended consequences of
ill-focused policy, driving the US market in foreign companies’ bonds offshore,
where it has remained ever since.
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Economic Importance of the Corporate
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(c) Uncoordinated withholding tax policy is a recurring source of uncertainty and cost
for retail and institutional investors in corporate bond markets, and has a particularly
deadening effect on retail markets. Unilateral withholding of tax from interest paid to
foreign investors disadvantages those investors and so deters them from investing:
at worst they cannot recover double tax, and at best there is a delay before they
are reimbursed the excess tax paid. Either way, international investment is inhibited.
Good regulation and good
conduct work together. ICMA is
keen to work with the
authorities worldwide at an early
stage of policy development, to
ensure that we all understand
public policy needs and the best
techniques for meeting them,
and that we avoid both
malpractice and unintended
harm to market users.
Current areas where concerns are widespread about the impact of new regulation
on the ability of corporate bond markets to fulfil their economic function effectively
include: the effect of legislative proposals implementing the Third Basel Accord on
intermediaries’ ability to support the market; the impact of financial transaction taxes on
market participants; the narrowness of market making exemptions in EU short selling
Regulations as a limiting factor in investors’ ability to hedge their corporate bond trades;
and the adaptation of updated EU Regulations on Markets in Financial Instruments to
the special liquidity characteristics of corporate bond markets described above. Careful
calibration and adjustment will be vital to protect liquidity in the secondary market and
avoid consequent harm to the primary market. Good regulation of corporate bond
markets is as vital as good conduct in them. Intermediary firms - ICMA’s members
- are subject to ICMA standards of good practice, and to applicable national laws
and regulations. Rules, whether promulgated by industry bodies or imposed by the
authorities, can have beneficial or benign or harmful effects. Sometimes good intentions
are thwarted by unintended consequences. It is easy, for markets as well as the
authorities, to get things wrong. That is why we think it is important for all interested
parties - legislators, regulators, market intermediaries, and market users -
to work together, with a better dialogue at an early stage of policy development, to
help the authorities understand the markets and the possible effect on them of different
measures, to enable the markets to understand the authorities’ policy intentions and
advise on the best technical ways of meeting them, to promote good regulation
and prevent malpractice, but also to ensure that avoidable and unintended problems
are avoided.
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Annex: Statistics
This Annex includes graphs sourced from Dealogic data, except for the graph on bank
funding and general corporate funding costs, which derive from Bloomberg data. The
graphs relate to a range of aspects of the corporate bond markets discussed in this paper.
Data for ‘international’ bonds relate to transactions marketed to international investors.
Graph 1: International v
domestic bond volumes
18
Annex:
Statistics
This
Annex
includes
graphs
sourced
from
Dealogic
data
(as
at
24th
February
2013),
except
for
th
bank
funding
and
general
corporate
funding
costs,
which
derive
from
Bloomberg
data.
The
grap
a
range
of
aspects
of
the
corporate
bond
markets
discussed
in
this
paper.
Graph
1:
International
v
domestic
bond
volumes
Source
–
Dealogic,
26
February,
2013
Graph
2:
EMEA
corporate
loans
v
corporate
bonds
Source
–
Dealogic,
26
February,
2013
0
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012
$ bn
Domestic International
0
200
400
600
800
1,000
1,200
1,400
1,600
2007 2008 2009 2010 2011 2012
$ bn
Loans Bonds
Source – Dealogic, 26 February, 2013
Graph 2: EMEA
corporate loans v
corporate bonds
18
Annex:
Statistics
This
Annex
includes
graphs
sourced
from
Dealogic
data
(as
at
24th
February
2013),
except
for
th
bank
funding
and
general
corporate
funding
costs,
which
derive
from
Bloomberg
data.
The
grap
a
range
of
aspects
of
the
corporate
bond
markets
discussed
in
this
paper.
Graph
1:
International
v
domestic
bond
volumes
Source
–
Dealogic,
26
February,
2013
Graph
2:
EMEA
corporate
loans
v
corporate
bonds
Source
–
Dealogic,
26
February,
2013
0
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012
$ bn
Domestic International
0
200
400
600
800
1,000
1,200
1,400
1,600
2007 2008 2009 2010 2011 2012
$ bn
Loans Bonds
Source – Dealogic, 26 February, 2013
Graph 3: EU corporate
bond issuance
Graph
3:
EU
corporate
bond
issuance
Source
–
Dealogic,
26
February,
2013
Graph
4:
Collateralised
all
international
volumes
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011 2012
$ bn
EU Corps
Source – Dealogic, 26 February, 2013
20. 20
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
Graph 4: Collateralised
all international volumes
19
Source
–
Dealogic,
26
February,
2013
Graph
4:
Collateralised
all
international
volumes
Source
–
Dealogic,
26
February,
2013
Graph
5:
All
international
bonds
deal
type
breakdown
Source
–
Dealogic,
26
February,
2013
0
100
200
300
400
500
2006 2007 2008 2009 2010 2011 2012
EU Corps
0
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012
$ bn
Non-collateralized Collateralized
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
IG Corps SSA ABS Covered MTN HY Corps
Source – Dealogic, 26 February, 2013
Graph 5: All international
bonds deal type
breakdown
19
Source
–
Dealogic,
26
February,
2013
Graph
4:
Collateralised
all
international
volumes
Source
–
Dealogic,
26
February,
2013
Graph
5:
All
international
bonds
deal
type
breakdown
Source
–
Dealogic,
26
February,
2013
0
100
200
300
2006 2007 2008 2009 2010 2011 2012
EU Corps
0
1,000
2,000
3,000
4,000
2006 2007 2008 2009 2010 2011 2012
$ bn
Non-collateralized Collateralized
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
IG Corps SSA ABS Covered MTN HY Corps
Source – Dealogic, 26 February, 2013
Graph 6: All international
bonds currency
breakdown
Graph
6:
All
international
bonds
currency
breakdown
Source
–
Dealogic,
26
February,
2013
Graph
7:
All
international
bonds
tenor
breakdown
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
USD EUR Other GBP
2,500
3,000
3,500
4,000
4,500
$ bn
Source – Dealogic, 26 February, 2013
21. 21
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
Graph 7: All international
bonds tenor breakdown
20
Source
–
Dealogic,
26
February,
2013
Graph
7:
All
international
bonds
tenor
breakdown
Source
–
Dealogic,
26
February,
2013
Graph
8:
Global
financial
institutions
v
other
corporate
bonds
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2006 2007 2008 2009 2010 2011 2012
USD EUR Other GBP
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
3yrs or less >3-5yrs >5-7yrs >7-10yrs >15yrs >10-15yrs
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2007 2008 2009 2010 2011 2012
$ bn
FIG Corp
Source – Dealogic, 26 February, 2013
Graph 8: Global financial
institutions v other
corporate bonds
20
Source
–
Dealogic,
26
February,
2013
Graph
7:
All
international
bonds
tenor
breakdown
Source
–
Dealogic,
26
February,
2013
Graph
8:
Global
financial
institutions
v
other
corporate
bonds
0
500
1,000
1,500
2,000
2006 2007 2008 2009 2010 2011 2012
USD EUR Other GBP
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
3yrs or less >3-5yrs >5-7yrs >7-10yrs >15yrs >10-15yrs
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2007 2008 2009 2010 2011 2012
$ bn
FIG Corp
Source – Dealogic, 26 February, 2013
Graph 9: International
corporate bond market
use of proceeds
Source
–
Dealogic,
26
February,
2013
Graph
9:
International
corporate
bond
market
use
of
proceeds
Source
–
Dealogic,
26
February,
2013
Graph
10:
International
bank
loan
v
bond
volumes
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2006 2007 2008 2009 2010 2011 2012
$ bn
Other M&A
3,000
3,500
4,000
4,500
5,000
$ bn
Source – Dealogic, 26 February, 2013
22. 22
Economic Importance of the Corporate
Bond Markets | www.icmagroup.org
Graph 10: International
bank loan v bond
volumes
21
Source
–
Dealogic,
26
February,
2013
Graph
10:
International
bank
loan
v
bond
volumes
Source
–
Dealogic,
26
February,
2013
Graph
11:
International
sovereign
and
supranational
authority
bond
volumes
0
200
400
600
800
1,000
1,200
1,400
2006 2007 2008 2009 2010 2011 2012
Other M&A
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2006 2007 2008 2009 2010 2011 2012
$ bn
Loans Int. Bonds
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
Everything Else SSA
Source – Dealogic, 26 February, 2013
Graph 11: International
sovereign and
supranational authority
bond volumes
21
Source
–
Dealogic,
26
February,
2013
Graph
10:
International
bank
loan
v
bond
volumes
Source
–
Dealogic,
26
February,
2013
Graph
11:
International
sovereign
and
supranational
authority
bond
volumes
0
200
400
600
800
2006 2007 2008 2009 2010 2011 2012
Other M&A
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2006 2007 2008 2009 2010 2011 2012
$ bn
Loans Int. Bonds
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2006 2007 2008 2009 2010 2011 2012
$ bn
Everything Else SSA
Source – Dealogic, 26 February, 2013
Graph 12: Bank funding
costs v General credit
spreads
Source
–
Dealogic,
26
February,
2013
Graph
12:
Bank
funding
costs
v
General
credit
spreads
Source
-‐
Bloomberg
0
50
100
150
200
250
300
350
400
Jan-06 May-07 Sep-08 Feb-10 Jun-11 Nov-12
Index
iTraxx Sr Fin iTraxx Main
Source - Bloomberg