The Impact of Contractual Savings Institutions on Securities Markets

By G. Impavido, A. Musalem, T. Tressel. 2003

117 citations recorded by the source corpus.

The authors assess empirically the impact of contractual savings institutions portfolios (pension funds and life insurance companies) on securities markets, for example, depth and liquidity in the domestic stock market, and depth in the domestic bond market. They discuss how the institutionalization of savings can modify financial markets through the lengthening of securities' maturities. The results are the following: 1) An increase in assets of contractual savings institutions relative to domestic financial assets has a positive impact on the depth of stock and bond markets on average. 2) The impact on stock market depth and liquidity is nonlinear: it is stronger in countries where corporate information is more transparent. 3) There is evidence of a significant heterogeneity among countries: contractual savings have a stronger impact on securities markets in countries where the financial system is market based, pension fund contributions are mandatory, and international transactions in securities are lower. 4) The authors do not find that the impact of contractual savings institutions on securities markets is explained by the overall level of development, education, demographic structure or the legal environment.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/e550d708e8d6dca0cce19639bc108d3bfe002162

How researchers see this paper

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In Accounting

1. John D. Burger
2. F. Warnock
3. G. Karolyi

In Economics and Econometrics

1. John D. Burger
2. F. Warnock
3. Hélène Rey
4. Kristin J. Forbes
5. J. Caballero

In Finance

1. John D. Burger
2. F. Warnock
3. Hélène Rey
4. G. Karolyi
5. Philip R. Lane
6. Kristin J. Forbes
7. J. Caballero

Citations in the corpus

• Foreign Participation in Local-Currency Bond Markets (2004, background): “They are also consistent with the model of Jeanne (2003), which shows an important role for monetary policy credibility in explaining the currency composition of a country’s debt.”
• Local Currency Bond Markets (2006, unknown): “2 For example, Jeanne and Zettelmeyer (2002) start from a situation of original sin and examine solutions that involve international lending 3 For the particular global solution proposed by EHP, see the November 22, 2002 Financial Times op-ed by Eichengreen and Hausmann, “How to Eliminate Original F”