Brazil’s Capital Market: Current Status and Issues for Further Development

September 1, 2012

Preview Citation

Format: Chicago

Joonkyu Park. Brazil’s Capital Market: Current Status and Issues for Further Development, (USA: International Monetary Fund, 2012) accessed December 25, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Capital market development in Brazil is a key policy issue going forward to foster savings, investment and absorptive capacity in a context of prospects for sizable capital flows in the medium term. During the last decade, Brazil has achieved substantial progress in capital market development. The menu of available financial instruments has been expanded, market infrastructure has been reformed and strengthened, and a diversified investor base has been built. Nonetheless, Brazil’s capital markets are still facing a number of challenges including prevalent short-term indexation, investors’ risk aversion to long-term fixed rate bonds, still low liquidity in the secondary market, and managing the role of BNDES. A shift to a lower yield curve environment should continue to gradually take place. But further progress will require continued policy effort to assure macro stability and financial sector reforms to promote the development of longer-term private finance.

Subject: Bonds, Capital markets, Financial institutions, Financial markets, Mutual funds, Securities markets, Sovereign bonds

Keywords: Asset allocation, Bond market, Bonds, Capital market development, Capital markets, Exchange operation, Global, Government bond, Government bond market, Infrastructure bond, Investor, Investor base, Investor composition, Majority investor, Market, Mutual fund, Mutual funds, Non-resident investor, Public offering, Risk aversion, Secondary market, Securities markets, Sovereign bonds, WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2012/224
Stock No:

WPIEA2012224
ISBN:

9781475510256
ISSN:

1018-5941

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