The Long and the Short of Emerging Market Debt
Emerging economies have tried to promote long-term debt because it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-t...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090916132644 http://hdl.handle.net/10986/4247 |
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okr-10986-4247 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING ARBITRAGE ASSET CLASS ASSET CLASSES ASSET HOLDINGS ASSET MANAGEMENT ASSET MANAGERS ASSET PRICES ASSET-LIABILITY MANAGEMENT BACKED SECURITIES BAILOUT BANK DEPOSITS BANK POLICY BANKING CRISIS BANKING SECTOR BANKING SYSTEM BID BOND BOND FUNDS BOND MARKETS BONDS BORROWER CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH WITHDRAWALS CENTRAL BANK COMPARABLE MATURITY CONFLICTS OF INTEREST CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE DEBT CORPORATE PAPER CORPORATE PERFORMANCE CREDIT RATING CREDITORS CRISES IN EMERGING MARKETS DATA AVAILABILITY DEBT BURDEN DEBT HOLDINGS DEBT INSTRUMENTS DEBT ISSUANCES DEBT MANAGEMENT DEBT MATURITIES DEBT MATURITY DEBTORS DEREGULATION DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT BANK DIFFERENT CURRENCIES DIFFERENT CURRENCY DOLLAR DEBT DOMESTIC BOND DOMESTIC BONDS DOMESTIC INSTITUTIONAL INVESTORS DOMESTIC SECURITIES EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ASSETS EMERGING MARKET DEBT EMERGING MARKET GOVERNMENTS EMERGING MARKET INVESTORS EMERGING MARKETS EXCHANGE RATES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SYSTEM FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN FUNDS FOREIGN INVESTMENT FUND DATA FUND MANAGERS FUND PERIOD FUND PERIODS GLOBAL FINANCE GLOBALIZATION GOVERNMENT BONDS GOVERNMENT PAPER GOVERNMENT SECURITIES HEDGES HOLDING HOLDINGS HOLDINGS OF BANK INCENTIVE STRUCTURE INCOME INDEXED BONDS INFLATION INFLATION MOVEMENTS INFLATION RISK INFLATION RISKS INFLATION VOLATILITY INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSTRUMENT INSURANCE INSURANCE COMPANIES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INVESTING INVESTMENT HORIZON INVESTMENT HORIZONS INVESTMENT INSTRUMENTS INVESTMENT OPPORTUNITIES INVESTMENT VEHICLES INVESTOR BASE INVESTOR BEHAVIOR INVESTOR DEMAND INVESTOR INCENTIVES INVESTOR REDEMPTIONS ISSUANCE ISSUANCES LENDER LENDER OF LAST RESORT LEVEL OF CONFIDENCE LEVY LIABILITY LIFE INSURANCE LIQUID ASSETS LIQUIDATIONS LIQUIDITY LIQUIDITY CRISES LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM CAPITAL LONG-TERM DEBT LONG-TERM FUNDS LONG-TERM INSTRUMENTS LONG-TERM INVESTMENTS LONG-TERM INVESTORS LONG-TERM LENDING LONG-TERM LIABILITIES MACROECONOMIC STABILIZATION MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET CONDITIONS MARKET DISCIPLINE MATURITIES MATURITY MATURITY DATE MATURITY MISMATCH MATURITY MISMATCHES MATURITY STRUCTURE MATURITY STRUCTURES MAXIMUM MATURITY MORAL HAZARD MORTGAGE MUTUAL FUND MUTUAL FUND INDUSTRIES MUTUAL FUND INVESTORS MUTUAL FUND MANAGERS MUTUAL FUND SHARES MUTUAL FUND STRATEGIES MUTUAL FUNDS OPEN-END FUNDS OPPORTUNITY COST OPTIMAL PORTFOLIO OUTSTANDING DEBT PENSION PENSION FUND PENSION FUNDS PENSION SYSTEM PENSION SYSTEMS PENSIONS PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO CHOICE PORTFOLIO HOLDINGS PORTFOLIO INVESTMENTS PORTFOLIO MANAGEMENT PORTFOLIO REGULATIONS PORTFOLIOS PRICE RISK PROBABILITY PUBLIC DEBT REGULATORY CONSTRAINTS RESEARCH ASSISTANCE RETURN RETURNS RISK AVERSION RISK MANAGEMENT RISK PREMIUM RISK PROFILE RISK PROFILES RISK REDUCTION SECURITIES SHARE OF ASSETS SHORT MATURITIES SHORT-TERM ASSET SHORT-TERM ASSETS SHORT-TERM BOND SHORT-TERM BONDS SHORT-TERM BORROWING SHORT-TERM CAPITAL SHORT-TERM DEBT SHORT-TERM INSTRUMENTS SOVEREIGN BONDS SOVEREIGN DEBT STOCK MARKET STOCK MARKET COLLAPSES STOCKS SYSTEMIC RISK TERM CONTRACTS TYPE OF INVESTOR TYPES OF INSTRUMENTS VOLATILITY |
| spellingShingle |
ACCOUNTING ARBITRAGE ASSET CLASS ASSET CLASSES ASSET HOLDINGS ASSET MANAGEMENT ASSET MANAGERS ASSET PRICES ASSET-LIABILITY MANAGEMENT BACKED SECURITIES BAILOUT BANK DEPOSITS BANK POLICY BANKING CRISIS BANKING SECTOR BANKING SYSTEM BID BOND BOND FUNDS BOND MARKETS BONDS BORROWER CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH WITHDRAWALS CENTRAL BANK COMPARABLE MATURITY CONFLICTS OF INTEREST CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE DEBT CORPORATE PAPER CORPORATE PERFORMANCE CREDIT RATING CREDITORS CRISES IN EMERGING MARKETS DATA AVAILABILITY DEBT BURDEN DEBT HOLDINGS DEBT INSTRUMENTS DEBT ISSUANCES DEBT MANAGEMENT DEBT MATURITIES DEBT MATURITY DEBTORS DEREGULATION DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT BANK DIFFERENT CURRENCIES DIFFERENT CURRENCY DOLLAR DEBT DOMESTIC BOND DOMESTIC BONDS DOMESTIC INSTITUTIONAL INVESTORS DOMESTIC SECURITIES EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ASSETS EMERGING MARKET DEBT EMERGING MARKET GOVERNMENTS EMERGING MARKET INVESTORS EMERGING MARKETS EXCHANGE RATES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SYSTEM FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN FUNDS FOREIGN INVESTMENT FUND DATA FUND MANAGERS FUND PERIOD FUND PERIODS GLOBAL FINANCE GLOBALIZATION GOVERNMENT BONDS GOVERNMENT PAPER GOVERNMENT SECURITIES HEDGES HOLDING HOLDINGS HOLDINGS OF BANK INCENTIVE STRUCTURE INCOME INDEXED BONDS INFLATION INFLATION MOVEMENTS INFLATION RISK INFLATION RISKS INFLATION VOLATILITY INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSTRUMENT INSURANCE INSURANCE COMPANIES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INVESTING INVESTMENT HORIZON INVESTMENT HORIZONS INVESTMENT INSTRUMENTS INVESTMENT OPPORTUNITIES INVESTMENT VEHICLES INVESTOR BASE INVESTOR BEHAVIOR INVESTOR DEMAND INVESTOR INCENTIVES INVESTOR REDEMPTIONS ISSUANCE ISSUANCES LENDER LENDER OF LAST RESORT LEVEL OF CONFIDENCE LEVY LIABILITY LIFE INSURANCE LIQUID ASSETS LIQUIDATIONS LIQUIDITY LIQUIDITY CRISES LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM CAPITAL LONG-TERM DEBT LONG-TERM FUNDS LONG-TERM INSTRUMENTS LONG-TERM INVESTMENTS LONG-TERM INVESTORS LONG-TERM LENDING LONG-TERM LIABILITIES MACROECONOMIC STABILIZATION MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET CONDITIONS MARKET DISCIPLINE MATURITIES MATURITY MATURITY DATE MATURITY MISMATCH MATURITY MISMATCHES MATURITY STRUCTURE MATURITY STRUCTURES MAXIMUM MATURITY MORAL HAZARD MORTGAGE MUTUAL FUND MUTUAL FUND INDUSTRIES MUTUAL FUND INVESTORS MUTUAL FUND MANAGERS MUTUAL FUND SHARES MUTUAL FUND STRATEGIES MUTUAL FUNDS OPEN-END FUNDS OPPORTUNITY COST OPTIMAL PORTFOLIO OUTSTANDING DEBT PENSION PENSION FUND PENSION FUNDS PENSION SYSTEM PENSION SYSTEMS PENSIONS PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO CHOICE PORTFOLIO HOLDINGS PORTFOLIO INVESTMENTS PORTFOLIO MANAGEMENT PORTFOLIO REGULATIONS PORTFOLIOS PRICE RISK PROBABILITY PUBLIC DEBT REGULATORY CONSTRAINTS RESEARCH ASSISTANCE RETURN RETURNS RISK AVERSION RISK MANAGEMENT RISK PREMIUM RISK PROFILE RISK PROFILES RISK REDUCTION SECURITIES SHARE OF ASSETS SHORT MATURITIES SHORT-TERM ASSET SHORT-TERM ASSETS SHORT-TERM BOND SHORT-TERM BONDS SHORT-TERM BORROWING SHORT-TERM CAPITAL SHORT-TERM DEBT SHORT-TERM INSTRUMENTS SOVEREIGN BONDS SOVEREIGN DEBT STOCK MARKET STOCK MARKET COLLAPSES STOCKS SYSTEMIC RISK TERM CONTRACTS TYPE OF INVESTOR TYPES OF INSTRUMENTS VOLATILITY Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. The Long and the Short of Emerging Market Debt |
| geographic_facet |
Latin America & Caribbean Latin America & Caribbean South America America Chile |
| relation |
Policy Research working paper ; no. WPS 5056 |
| description |
Emerging economies have tried to promote
long-term debt because it reduces maturity mismatches and
the probability of crises. This paper uses unique evidence
from the leading case of Chile to study to what extent there
is domestic demand for long-term instruments. The authors
analyze monthly asset-level portfolios of Chilean
institutional investors (mutual funds, pension funds, and
insurance companies) and compare their maturity structure to
that of US bond mutual funds. Despite being thought to
invest long term, Chilean asset-management institutions
(mutual and pension funds) hold large amounts of short-term
assets relative to US mutual funds and Chilean insurance
companies. Short-termism is not driven by lack of instrument
availability or tactical behavior. Instead, it seems to be
explained by the desire to minimize inflation risk and, more
importantly, by manager incentives that tilt demand toward
short-term instruments. Extending the maturity of emerging
market debt may require reducing risk and reshaping investor incentives. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. |
| author_facet |
Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. |
| author_sort |
Opazo, Luis |
| title |
The Long and the Short of Emerging Market Debt |
| title_short |
The Long and the Short of Emerging Market Debt |
| title_full |
The Long and the Short of Emerging Market Debt |
| title_fullStr |
The Long and the Short of Emerging Market Debt |
| title_full_unstemmed |
The Long and the Short of Emerging Market Debt |
| title_sort |
long and the short of emerging market debt |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090916132644 http://hdl.handle.net/10986/4247 |
| _version_ |
1764390583312318464 |
| spelling |
okr-10986-42472021-04-23T14:02:16Z The Long and the Short of Emerging Market Debt Opazo, Luis Raddatz, Claudio Schmukler, Sergio L. ACCOUNTING ARBITRAGE ASSET CLASS ASSET CLASSES ASSET HOLDINGS ASSET MANAGEMENT ASSET MANAGERS ASSET PRICES ASSET-LIABILITY MANAGEMENT BACKED SECURITIES BAILOUT BANK DEPOSITS BANK POLICY BANKING CRISIS BANKING SECTOR BANKING SYSTEM BID BOND BOND FUNDS BOND MARKETS BONDS BORROWER CAPITAL FLOWS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH WITHDRAWALS CENTRAL BANK COMPARABLE MATURITY CONFLICTS OF INTEREST CORPORATE BOND CORPORATE BOND MARKET CORPORATE BONDS CORPORATE DEBT CORPORATE PAPER CORPORATE PERFORMANCE CREDIT RATING CREDITORS CRISES IN EMERGING MARKETS DATA AVAILABILITY DEBT BURDEN DEBT HOLDINGS DEBT INSTRUMENTS DEBT ISSUANCES DEBT MANAGEMENT DEBT MATURITIES DEBT MATURITY DEBTORS DEREGULATION DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT BANK DIFFERENT CURRENCIES DIFFERENT CURRENCY DOLLAR DEBT DOMESTIC BOND DOMESTIC BONDS DOMESTIC INSTITUTIONAL INVESTORS DOMESTIC SECURITIES EMERGING ECONOMIES EMERGING MARKET EMERGING MARKET ASSETS EMERGING MARKET DEBT EMERGING MARKET GOVERNMENTS EMERGING MARKET INVESTORS EMERGING MARKETS EXCHANGE RATES FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SYSTEM FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN FUNDS FOREIGN INVESTMENT FUND DATA FUND MANAGERS FUND PERIOD FUND PERIODS GLOBAL FINANCE GLOBALIZATION GOVERNMENT BONDS GOVERNMENT PAPER GOVERNMENT SECURITIES HEDGES HOLDING HOLDINGS HOLDINGS OF BANK INCENTIVE STRUCTURE INCOME INDEXED BONDS INFLATION INFLATION MOVEMENTS INFLATION RISK INFLATION RISKS INFLATION VOLATILITY INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INSTRUMENT INSURANCE INSURANCE COMPANIES INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INVESTING INVESTMENT HORIZON INVESTMENT HORIZONS INVESTMENT INSTRUMENTS INVESTMENT OPPORTUNITIES INVESTMENT VEHICLES INVESTOR BASE INVESTOR BEHAVIOR INVESTOR DEMAND INVESTOR INCENTIVES INVESTOR REDEMPTIONS ISSUANCE ISSUANCES LENDER LENDER OF LAST RESORT LEVEL OF CONFIDENCE LEVY LIABILITY LIFE INSURANCE LIQUID ASSETS LIQUIDATIONS LIQUIDITY LIQUIDITY CRISES LOCAL CURRENCY LONG-TERM ASSETS LONG-TERM CAPITAL LONG-TERM DEBT LONG-TERM FUNDS LONG-TERM INSTRUMENTS LONG-TERM INVESTMENTS LONG-TERM INVESTORS LONG-TERM LENDING LONG-TERM LIABILITIES MACROECONOMIC STABILIZATION MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET CONDITIONS MARKET DISCIPLINE MATURITIES MATURITY MATURITY DATE MATURITY MISMATCH MATURITY MISMATCHES MATURITY STRUCTURE MATURITY STRUCTURES MAXIMUM MATURITY MORAL HAZARD MORTGAGE MUTUAL FUND MUTUAL FUND INDUSTRIES MUTUAL FUND INVESTORS MUTUAL FUND MANAGERS MUTUAL FUND SHARES MUTUAL FUND STRATEGIES MUTUAL FUNDS OPEN-END FUNDS OPPORTUNITY COST OPTIMAL PORTFOLIO OUTSTANDING DEBT PENSION PENSION FUND PENSION FUNDS PENSION SYSTEM PENSION SYSTEMS PENSIONS PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO CHOICE PORTFOLIO HOLDINGS PORTFOLIO INVESTMENTS PORTFOLIO MANAGEMENT PORTFOLIO REGULATIONS PORTFOLIOS PRICE RISK PROBABILITY PUBLIC DEBT REGULATORY CONSTRAINTS RESEARCH ASSISTANCE RETURN RETURNS RISK AVERSION RISK MANAGEMENT RISK PREMIUM RISK PROFILE RISK PROFILES RISK REDUCTION SECURITIES SHARE OF ASSETS SHORT MATURITIES SHORT-TERM ASSET SHORT-TERM ASSETS SHORT-TERM BOND SHORT-TERM BONDS SHORT-TERM BORROWING SHORT-TERM CAPITAL SHORT-TERM DEBT SHORT-TERM INSTRUMENTS SOVEREIGN BONDS SOVEREIGN DEBT STOCK MARKET STOCK MARKET COLLAPSES STOCKS SYSTEMIC RISK TERM CONTRACTS TYPE OF INVESTOR TYPES OF INSTRUMENTS VOLATILITY Emerging economies have tried to promote long-term debt because it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-term instruments. The authors analyze monthly asset-level portfolios of Chilean institutional investors (mutual funds, pension funds, and insurance companies) and compare their maturity structure to that of US bond mutual funds. Despite being thought to invest long term, Chilean asset-management institutions (mutual and pension funds) hold large amounts of short-term assets relative to US mutual funds and Chilean insurance companies. Short-termism is not driven by lack of instrument availability or tactical behavior. Instead, it seems to be explained by the desire to minimize inflation risk and, more importantly, by manager incentives that tilt demand toward short-term instruments. Extending the maturity of emerging market debt may require reducing risk and reshaping investor incentives. 2012-03-19T19:12:33Z 2012-03-19T19:12:33Z 2009-09-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090916132644 http://hdl.handle.net/10986/4247 English Policy Research working paper ; no. WPS 5056 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Latin America & Caribbean Latin America & Caribbean South America America Chile |