New Insight on Corporate Debt Markets, by GDDI participant Sergio Schmukler at World Bank

Corporate debt markets have expanded rapidly at home and abroad since the early 1990s. The issuance of corporate bonds and syndicated loans around the world has grown 4 times faster than gross domestic product (GDP) between 1991 and 2014. In developed countries, debt issuance grew from 4 to 16 percent of GDP; in developing countries, from 1 to 4 percent of GDP. Corporate bond and syndicated loan markets also grew much more than equity markets and traditional bank credit to firms.

One concern with the raise in corporate debt levels is that risk is increasing, in particular because of potential currency and maturity mismatches. However, in a new working paper (Cortina, Didier, and Schmukler, 2016), we argue that firms have been raising funds at fairly long terms, 6.3 years on average, with no much differences between developed and developing countries. In the case of developing countries, part of the increase in risk that foreign currency bonds can entail might be compensated by longer maturities. Still, only the largest firms have been able to participate in this issuance activity, particularly in the long end of the maturity spectrum.

Cortina, Juan Jose, Didier, Tatiana, and Schmukler, SergioNew insights on , 2015. “How Long Do Corporates Borrow? Evidence from Global Bond and Loan Issuances,” World Bank Working Paper.

Need for effective global debt governance


“Against the background of the recent global financial crises it is crucial to assess global debt trends. Volatility in global debt flows and the changing financial landscape for emerging markets requires the build up of an efficient and effective global debt governance framework including an adequate debt governance framework by the International Financial Institutions. The upcoming workshop on global debt dynamics organised by the Sussex Centre for Global Political Economy (CGPE) in co-operation with IDS Centre for Rising Powers and Global Development (CRPD) provides the opportunity for many experts in this field to assess and discuss global debt trends.”

Kathrin Berensmann
Senior Researcher
German Development Institute