Discussions at the 12th OECD-WBG-IMF Global Bond Market Forum focused on three key areas related to the future of debt markets: (i) the challenges facing new and infrequent sovereign issuers in assuring durable market access in frontier and emerging markets; (ii) the future prospects for the securitisation and covered bond markets; and (iii) the future role of large bond investors.
Financial markets continue to struggle. In the current climate of elevated sovereign risks and hollowing of the investor base, it was becoming increasingly important for new and infrequent sovereign issuers to better manage investor relations. Securitisation issuance has slumped in recent years as the investor base narrows and the market faces a number of hurdles, in particular on the regulatory front. The global fixed income investor base is changing and has become more concentrated post crisis, with large bond investors playing an increasingly important role, and contributing to the strong increase in cross-border capital flows. Discussions also highlighted a number of ongoing risks, including (i) that investor uncertainty would prove critical in managing risk in the near-term and (ii) that some regulatory changes might aggravate the challenges facing debt managers.