The Development of Debt Financial Markets – the Case of Selected CEE and Latin America Economies
The Development of Debt Financial Markets – the Case of Selected CEE and Latin America Economies

Author(s): Jan Mači, Jan Öhm
Subject(s): National Economy, Business Economy / Management, Economic policy, Comparative politics, Financial Markets
Published by: Masarykova univerzita nakladatelství
Keywords: Debt; credit; corporate finance; financing policy; financial market;
Summary/Abstract: This article deals with loans and other debt sources provided to non-financial sector. Naturally, especially in perfect market conditions, all of the debt sources are substitutes to each other. However, in real economy the choice between loans and other debt (e.g. bonds) depends on many variables. Some studies state that the choice among variety of debt sources depends on the development of the financial market respectively of the economy as a whole. For example, it is quite well known that European market is rather bank-based, while US one rather capital-based. The aim of this paper is to characterize and compare the development of selected Central and Eastern European (CEE) and Latin America financial loan markets. For this purpose we analyzed the data from the Bank of International Settlements (BIS), which gathers these data from the reporting economies (e.g. advanced, emerging market and other economies). The method that was used for the data analysis was time series correlation analysis. From the conducted research there can be stated that there are no significant differences between the development of CEE and Latin America markets at aggregate level as well as among each analyzed country separately. The only notable exception is the development in Argentina, which still suffers from the consequences of state bankruptcy.

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