IMF International Capital Markets 1997--Contents

    WORLD ECONOMIC AND FINANCIAL SURVEYS
  International Capital Markets
   Developments, Prospects, and Key Policy Issues
                   November 1997

By an IMF Staff Team led by David Folkerts-Landau
with Donald J. Mathieson and Garry J. Schinasi

The International Capital Markets Report ceased publication in August 2001. Both the Report and the Emerging Market Financing quarterly (published 2000-2001) have been replaced by a new quarterly, The Global Financial Stability Report. The new report was created to provide timely and comprehensive coverage of both mature and emerging financial markets as part of the IMF's stepped up tracking of financial markets.

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Contents
	Preface
	List of Abbreviations

45k pdf file	I.	Introduction

193k pdf file	II.	Developments and Trends in the Mature Markets Foreign Exchange Markets: Capital Flows and the Rise of the Dollar Credit Markets: Spread Compression and Increased Volumes Risks in Foreign Exchange and Credit Markets Equity Markets Expanding and Maturing Derivative Markets Appendix: Market Surprised by Yen's Appreciation in May 1997

34k pdf file	III.	EMU: Systemic Implications and Challenges Global Financial Adjustments After Introduction of the Euro EMU and the Potential Benefits of Europe-Wide Securities Markets Consolidation and Restructuring of European Banking Systems Systemic Risk Management in EMU

76k pdf file	IV.	Developments and Prospects in Emerging Markets Capital Flows to Emerging Markets Performance of Emerging Debt and Equity Markets Sustainability of Capital Flows and Speculative Attacks Appendix 1: Sovereign Ratings and Fundamentals Appendix 2: Mechanics of Speculative Attacks

28k pdf file	V.	External Liability Management

35k pdf file	VI.	Developments in International Banking Industrial Countries Banking System Developments in Emerging Markets

58k pdf file	VII.	Emerging Market Currency Crises of July 1997

30k pdf file	VIII.	Conclusions Mature Markets Structural Aspects of EMU Emerging Markets External Liability Management Developments in International Banking

Background Material--Part I Recent Developments and Trends in Capital Markets and Banking Systems
	Annexes
329k pdf file	I.	Recent Developments in Emerging Capital Markets Capital Flows, Reserves, and Foreign Exchange Markets Bond Markets Equity Markets Mutual Funds International Bank Lending

522k pdf file	II.	Developments and Trends in the Mature Capital Markets Exchange Rates Bond Markets International Syndicated Loan Markets Equity Markets Derivative Markets Developments in Systemic Risk Management Appendix 1: Extracting Information from Options Prices Appendix 2: Have Securities Markets Become More Volatile? Appendix 3: Current U.S. Equity Prices Compared with the 1987 U.S. and 1989 Japanese Bubbles

160k pdf file	III.	Developments in International Banking Restructuring and Consolidation of International Banking Systems Supervisory and Regulatory Developments Developments in Profitability and Asset Quality in Selected Industrial Countries Banking System Developments in Selected Emerging Markets Appendix 1: Credit Derivatives Appendix 2: Accounting for Nonperforming Loans

Background Material--Part II Selected Issues
190k pdf file	IV.	European Monetary Union: Institutional Framework for Financial Policies and Structural Implications Potential Size of EMU Financial Markets Institutional Framework for Financial Markets Euro as a Catalyst: Incentives for Continued Structural Change Structural Implications for Securities Markets: Further Securitization of European Finance Structural Implications for Banking Systems Appendix: Remaining Impediments to Cross-Border Competition

87k pdf file	V.	Risk Management of Sovereign Liabilities Foreign Currency Exposure of Sovereign Liabilities Institutional Framework Strategic Management of Sovereign Liabilities Deviations from the Benchmark Portfolio Conclusion

95k pdf file	VI.	Capital Flows to Emerging Markets--A Historical Perspective Earlier Periods of High Capital Mobility International Capital Flows After the First Oil Shock Factors Stimulating Capital Flows and Renewed Market Access in the 1990s Appendix 1: Determinants of Balance of Payments and Banking Crises Appendix 2: Speculative Attacks in the 1990s: Have Economic Models Got It Right Yet?

33k pdf file	Statistical Appendix

37k pdf file	References

91k pdf file	Boxes Chapter
	IV.	Building a Resilient Financial System in Hong Kong, China
	Annexes
	I.	The Brady Bond Market Comes of Age Repackaged Brady Bonds Emerging Market Currency Eurobonds: The Eurorand Market
	II.	Trends in Fund Management Circuit Breakers
	IV.	ERM 2 Volatility and Correlation of Asset Returns in EMU
	VI.	Liberalization of Capital Controls in Emerging Markets

369k pdf file	Tables Chapters
	II.	Net Foreign Purchases of U.S. Bonds Net Purchases of Domestic Bonds by Nonresidents United States: International Transactions One-Year Interest Differentials with Germany, February 28, 1995, January 30, 1997, and May 31, 1997 Domestic and International Debt Securities: Amounts Outstanding and Net Issues Announced International Syndicated Credit Facilities by Nationality of Borrowers Average Spreads and Maturities on Eurocredits Major Industrial Countries: Equity Market Risk-Adjusted Returns in Local Currency (Sharpe Ratios) Markets for Selected Derivative Financial Instruments: Notional Principal Amounts Outstanding Notional Principal Value of Outstanding Interest Rate and Currency Swaps
	III.	Total Foreign Exchange Reserves Minus Gold in Selected Countries and Regions European Union (EU), North America, and Japan: Selected Indicators of the Size of the Capital Markets, 1995
	IV.	Private Capital Flows to Emerging Markets Emerging Market Total Return Equity and Debt Indices
	Annexes
	I.	Secondary Market Transactions in Debt Instruments of Emerging Markets Emerging Market Bond Issues, Equity Issues, and Syndicated Loan Commitments Emerging Market Bond Issues: Fixed-Rate, Floating-Rate, and Call Options Emerging Market International Bond Issues by Currency of Denomination Stock Market Turnover Ratio and Value of New Equity Issues in Selected Countries and Regions Emerging Market Medium- and Long-Term Syndicated Loan Commitments: Interest Margins and Refinancings Changes in Net Assets of BIS-Reporting Banks vis-à-vis Banks in Selected Countries and Regions
	II.	United States: Selected External Account Variables Major Industrial Countries: Bond and Equity Index Returns One-Year and Seven-Year Interest Differentials with Germany, February 28, 1995, January 1, 1996, January 30, 1997, and May 31, 1997 Outstanding Amounts of International Debt Securities Outstanding Amounts and Net Issues of International Debt Securities by Currency of Issue Changes in Net Assets of BIS-Reporting Banks vis-à-vis Banks in Selected Countries and Regions United States: Outstanding Repurchase Agreements (Repos) U.S. Mutual Funds: Net New Cash Flow and Total Assets
	III.	Bank Financial Strength Ratings for Selected Countries, June 2, 1997 Disintermediation in Selected Industrial Countries Japan and the United States: Summary of Prompt Corrective Action Provisions Major Industrial Countries: Commercial Bank Profitability Selected Asian Property Markets: Vacancy Rates and Changes in Rents Loan Classification in Selected Emerging Markets
	IV.	Amounts Outstanding of International Debt Securities by Currency and Country of Nationality, March 1997 Use of Selected Currencies on One Side of Foreign Exchange Transaction, April 1989, April 1992, and April 1995 Notional Principal Value of Outstanding and New Interest Rate and Currency Swaps, 1995 European System of Central Banks: Open Market Operations and Standing Facilities European System of Central Banks: Eligible Assets Key Monetary Policy Operating Procedures in Industrial Countries and in the European Central Bank Monetary and Supervisory Agencies Deposit Insurance Schemes for Commercial Banks in the European Union and G-10 Countries, 1995 Permissible Banking Activities and Bank Ownership in the European Union and G-10 Countries, 1995 List of Bank Activities Subject to Mutual Recognition in the European Union Components of Capital for Meeting the Capital Standards or Requirements in the European Union and G-10 Countries Commercial Bank Supervisory Practices in the European Union and G-10 Countries, 1995 Mutual Funds, June 1996 European Union: Cross-Border Interbank Assets European Union: Ratings of Foreign and Local Currency Debt of Sovereign Governments, May 29, 1997 European Union Countries, North America, and Japan: Foreign Currency Debt, 1996 Estimates of Credit Spreads of EU Sovereigns, September 1996 and June 1997 Interest Rate Spreads of Canadian Provinces Euro Benchmark Yield Curve: Germany vs. France Funds Raised in Capital Markets by Nonfinancial Enterprises in Selected Industrial Countries, 1990-95 European Union Countries, United States, and Japan: Equity Markets, 1996 Bank Restructuring: Number of Institutions and Size Concentration European Union Countries, North America, and Japan: Population per Bank Branch Mergers and Acquisition Activity in Banking European Union: Net Interest Margins European Union: Bank Profitability Implementation of the European Union Capital Adequacy and Investment Services Directives Regulatory Constraints on Portfolio Investment of Institutional Investors in Selected Industrial Countries
	V.	Long-Term Public and Publicly Guaranteed External Debt Outstanding and Reserves Excluding Gold in Selected Developing Countries, 1995 External Debt Profile of Selected Asian Countries, 1995 Institutional Structure of Debt Offices in OECD Countries: Debt Offices Within the Treasury Institutional Structure of Debt Offices in OECD Countries: Autonomous Debt Offices Institutional Structure of Debt Offices in OECD Countries: Debt Offices Within the Central Bank Institutional Structure of Debt Offices in OECD Countries: Debt Offices Within the Ministry of Finance
	VI.	Selected Crises, 1870-1914 External Financial Resources to Developing Countries Moody's Initial Ratings of Emerging Markets Countries Performance of Crises Indicators
	Statistical Appendix
		A1. Merrill Lynch Global Investor Survey A2. Net Foreign Purchases of U.S. Bonds A3. Net Purchases of Securities in Major Industrial Countries A4. External Positions of Banks in Individual Reporting Countries A5. Annual Turnover in Derivative Financial Instruments Traded on Organized Exchanges Worldwide A6. New Interest Rate and Currency Swaps A7. Currency Composition of Notional Principal Value of Outstanding Interest Rate and Currency Swaps

972k pdf file	Figures Chapters
	II.	Spot Exchange Rates United States, Japan, and Germany: Interest Rate Differentials Major European Countries: Exchange Rates vs. Deutsche Mark Implied Volatility: Japanese Yen and Deutsche Mark Three-Month Forwards Selected European Long-Term Interest Rate Differentials with Germany United States: Yield Spreads of Corporate Bonds over U.S. Treasuries Australia, Canada, and New Zealand: Yield Differentials on 10-Year Government Bonds Stock Market Indices: Major Industrial Countries Stock Market Indices: Smaller European Countries United States: Equity Market Performance
	IV.	Distribution for Yen-Dollar Exchange Rate in Early September 1997 Implied by Options Prices on May 5, 9, and 19, 1997 Private Market Financing for Emerging Markets
	V.	Yield Spreads: Emerging Market and High-Yield U.S. Corporate Bonds Emerging Markets: Sovereign Ratings and Fundamentals Bank Receipts and Payments Arising from Forward Contract Operations External Long-Term Public and Publicly Guaranteed Debt Outstanding
	VII.	Thailand: Selected Financial Indicators Financial Market Developments in Selected Asian Countries, 1997 Financial Market Developments in Selected Latin American Countries, 1997 Yield Curves in Selected Emerging Markets, July 1997
	Annexes
	I.	Net Private Capital Flows to Emerging Markets Total Reserves Minus Gold of Selected Emerging Markets, January 1990-May 1997 Exchange Rates of Selected Emerging Markets, January 1990-May 1997 Bond Markets: Selected Returns, Yields, and Spreads Yield Spreads for Selected Brady Bonds and U.S. Dollar-Denominated Eurobonds Emerging Market Debt: Volatility and Correlation of Returns with Mature Markets Brady and Eurobond Spreads Spreads and Maturities for Sovereign Borrowers Emerging Equity Markets: Selected Returns, Price-Earnings Ratios, and Expected Returns Emerging Equity Markets: Selected Volatilities, Return-Volatility Comparisons, and Correlations Emerging Market Mutual Funds
	II.	Major Industrial Countries: Exchange Rates, January 1994-May 1997 Major European Countries: Local Currency vs. Deutsche Mark, January 1994-May 1997 Major Industrial Countries: Real Growth in Broad Money Supply and Claims on Private Sector Major Industrial Countries: Short-Term Interest Rates Major Industrial Countries: Long-Term Interest Rates Bilateral Exchange Rates and Short-Term and Long-Term Interest Differentials vis-à-vis the U.S. Dollar Foreign and International Holdings of U.S. Public Debt RiskMetrics Daily Price Volatility for U.S. Dollar Spot Exchange Rates, January 19, 1995-May 30, 1997 Implied Volatility: Yen and Deutsche Mark Three-Month Forwards Selected European Long-Term Interest Rate Differentials with Germany Yield Differential for the 10-Year Government Bonds of Australia, Canada, and New Zealand United States: Yield Spreads of Corporate Bonds over U.S. Treasuries RiskMetrics Daily Price Volatility for 10-Year Government Bonds, January 19, 1995-May 30, 1997 Spreads on Eurocredits Major Industrial Countries: Stock Market Indices United States: Corporate Profits and Market Capitalization United States: Corporate Profits Volatility Implied Volatility: S&P 500, Nikkei 225, and DAX Indices Distribution for Yen/Dollar Exchange Rate in Early September 1997 Implied by Options Prices on May 20, 1997 Historical Stock and Bond Price Volatility in the United States, Japan, and Germany United States and Japan: Developments in Equity, Bond, and Money Markets Surrounding Significant Stock Market Increases
	III.	Major Industrial Countries: Intemediation Spreads
	IV.	Cross-Border Target Payment Labor Costs and Productivity in Banking, 1994
	V.	External Long-Term Public and Publicly Guaranteed Debt Outstanding
	VI.	Capital Mobility Index Net Capital Outflows, 1880-1913 Net Capital Inflows, 1880-1913 Contributions of Capital Flows to Investment, 1870-1914 versus 1980-90s
	Box
	9.	Capital Controls in and Flows to Emerging Markets