The development of the global financial market is accompanied by the emergence of specialized financial products, which in turn provides the formation of new segments. Competition leads to the transformation of the international financial services sector.
The growing fears of international bond market participants are determined by the fact that in recent decades, instruments circulating in the financial markets have become:
This leads to more complex business structures and is associated with higher risks and volatile prices. In particular, in current conditions of the growing interdependence of capital markets, its part is also growing, which is associated with currency derivatives - currency forwards, futures, etc.
An essential problem of the international bond market is the lag of uniform regulatory and accounting standards from the pace of innovation in this sector of the economy. The market for financial instruments in short terms is becoming more and more global, while there are no unified requirements for operations with them, which leads to differences in the systems of supervision, changeability of interest rates, and assessment of instruments in different countries.
In these conditions, participants of the bond market have the opportunity to choose countries with less stringent regulations, which leads to regulatory and accounting arbitration. On the other hand, countries attracting capital on bond markets are not interested in adopting stricter rules than in other countries, since they may lose attractiveness as part of the global financial market in favor of states with less burdensome standards, which will directly affect the interest rate, the levels of capital inflows and employment.
A narrow interpretation of the global bond market can be considered as a combination of operations with international bonds in national markets, purchases, and sales of global securities proper.
Thus, the global stock exchange market is divided into two main parts: the foreign securities market and the European securities market, including derivatives. Based on the data of the Bank for International Settlements, the market volume, excluding short-term liabilities, as of mid-2012, was estimated at 28.4 trillion dollars.
H3: The rules of bonds’ issue
In the foreign debt securities market, bonds are issued in the currency of the country of placement, and for the investor, it is external. These securities are usually placed using an integrated group of banks or their branches operating in the country of placement, for example, in:
Each country has its local financial standards and rules of bond trading on local markets. The level of risk in different countries is also different.
The indicated market segments, in turn, are divided into equity and bond markets. The international bond market retains its role as the primary source of raising funds and stimulating investment in the global financial market. The volume of their issue significantly exceeds the corresponding indicator for equity securities. The price and the amount are connected.
The circle of issuers of international bonds on the market is much broader and includes, along with:
International financial organizations are also included in this list.
According to this brief report, there are significant differences like market regulation for these groups of instruments. Local laws govern operations with foreign bonds and shares. The control of the European paper market at the investor’s level is carried out through particular intermediaries.