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A History of Australian Corporate Bonds

Author

Listed:
  • Susan Black

    (Reserve Bank of Australia)

  • Joshua Kirkwood

    (Reserve Bank of Australia)

  • Alan Rai

    (Reserve Bank of Australia)

  • Thomas Williams

    (Reserve Bank of Australia)

Abstract

This paper examines the development of Australian corporate bond issuance since the early 20th century, based on a new unit-record dataset that we have compiled. Issuance trends have changed significantly over the past century as bond markets have become more diverse, sophisticated and globally integrated. A number of changes over the past century are discussed: (i) today, issuance is largely by private entities whereas it was dominated by government-owned corporations historically; (ii) the issuer base has shifted from being mostly non-financial corporations towards banks; (iii) a wide range of entities are now able to tap the bond market; (iv) Australian corporations now raise a large share of funds offshore; and (v) the investor base has shifted away from direct holdings by households towards indirect holdings through superannuation/managed funds and holdings by non-residents. These developments have largely been due to: the evolution of the structure of the Australian economy; privatisations; and changes in the regulatory landscape, particularly the deregulation of the banking system in the 1980s, and the floating of the exchange rate and abolition of capital controls in 1983.

Suggested Citation

  • Susan Black & Joshua Kirkwood & Alan Rai & Thomas Williams, 2012. "A History of Australian Corporate Bonds," RBA Research Discussion Papers rdp2012-09, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp2012-09
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    File URL: https://www.rba.gov.au/publications/rdp/2012/pdf/rdp2012-09.pdf
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    References listed on IDEAS

    as
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    8. Merrett, David T. & Ville, Simon, 2009. "Financing Growth: New Issues by Australian Firms, 1920–1939," Business History Review, Cambridge University Press, vol. 83(3), pages 563-589, October.
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    Cited by:

    1. Alex Frino & Andrew Lepone & Grace Lepone, 2019. "Price Impact of Corporate Bond Trading: Evidence from the Australian Securities Exchange," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-22, September.
    2. Christine Brown & Viet Do & Oscar Trevarthen, 2017. "Liquidity shock management: Lessons from Australian banks," Australian Journal of Management, Australian School of Business, vol. 42(4), pages 637-652, November.
    3. Viet Do & Tram Vu, 2018. "The additional cost of hedging in foreign currency loans," Australian Journal of Management, Australian School of Business, vol. 43(2), pages 305-327, May.
    4. Mark Westcott & John Murray, 2017. "Financialisation and inequality in Australia," The Economic and Labour Relations Review, , vol. 28(4), pages 519-537, December.
    5. Pedro Gomis-Porqueras & Romina Ruprecht & Xuan Zhou, 2023. "A Financial Stress Index for a Small Open Economy: The Australian Case," Finance and Economics Discussion Series 2023-029, Board of Governors of the Federal Reserve System (U.S.).
    6. Vu, Tram & Do, Viet & Skully, Michael, 2015. "Local versus foreign banks: A home market advantage in loan syndications," International Review of Financial Analysis, Elsevier, vol. 37(C), pages 29-39.
    7. Robert J. Bianchi & Michael E. Drew & Eduardo Roca & Timothy Whittaker, 2017. "Risk factors in Australian bond returns," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(2), pages 373-400, June.

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    More about this item

    Keywords

    Australia; bond market; history; regulation;
    All these keywords.

    JEL classification:

    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania
    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania

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