Milan Nedeljkovic's Books

What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies

By: Ms.Diana Ayala Pena,Milan Nedeljkovic,Christian Saborowski

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What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies

By: Ms.Diana Ayala Pena,Milan Nedeljkovic,Christian Saborowski

This paper studies the determinants of shifts in debt composition among EM non-financial corporates. We show that institutions and macro fundamentals create an enabling environment for bond market development. During the recent boom episode, however, global cyclical factors accounted for most of the variation of bond shares in total corporate debt. The sensitivity to global factors appears to vary with relative bond market size—which we interpret to be associated with liquidity and easy entry and exit—rather than local fundamentals. Foreign bank linkages help explain why bond markets increasingly substituted for banks in channeling liquidity to EMs. Our results highlight the risk of capital flow reversal in EMs that benefited from the upturn in the global financial cycle mostly due to their liquid markets rather than strong fundamentals.

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International Monetary Fund

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ISBN 10

1513579754

ISBN 13

9781513579757

The Relative Effectiveness of Spot and Derivatives Based Intervention

The Case of Brazil

By: Milan Nedeljkovic,Christian Saborowski

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The Relative Effectiveness of Spot and Derivatives Based Intervention

The Case of Brazil

By: Milan Nedeljkovic,Christian Saborowski

This paper studies the relative effectiveness of foreign exchange intervention in spot and derivatives markets. We make use of Brazilian data where spot and non-deliverable futures based intervention have been used in tandem for more than a decade. The analysis finds evidence in favor of a significant link between both modes of intervention and the first two moments of the real/dollar exchange rate. As predicted by theory for the case of negligible convertibility risk, the impact of spot market intervention in our baseline sample is strikingly similar to that achieved through futures based intervention worth an equivalent amount in notional principal.

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