Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5083071 | International Review of Economics & Finance | 2017 | 37 Pages |
Abstract
Supervising the bond market in developing countries is challenging due to the lack of vehicles and structures that exist in rich economies. The investors may not cognize the risks in fixed-incomes and their impacts, particularly the default risk. Our study first documents the background and causes of the bond fund crisis in Taiwan in 2004 and further evaluates the effectiveness of the regulator's policies that responded the crisis. Using the data during 2006:01-2013:12, the findings that the quoted term structure of yield to maturities provides accurate corporate bond pricing confirm the feasibility of the new regulations. However, some observations show that volatile forward rates cause negative spreads and implausible survival probability curves. We discuss the findings and provide suggestions for further research.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Shyan Yuan Lee, Wan-Jiun Paul Chiou, Yi-Fang Chung,