Bond market development and integration in ASEAN

The Association of Southeast Asian Nations (ASEAN) has focused increasingly on financial integration as part of its economic-deepening agenda. This paper considers the challenges and opportunities associated with the creation of an ASEAN bond market. In addition to surveying the status quo of fixed-income markets in the context of capital market development and integration in the region, the paper gauges the benefits that might be generated through, inter alia, financial market diversification and interest rate convergence. It also addresses approaches to the inevitable liquidity problem, such as via the creation of an ASEAN currency basket. Copyright © 2005 John Wiley & Sons, Ltd.