Bank of Mexico paper warns of EM bond runs
Paper stresses vulnerability in face of Fed lift-off even when leverage is low
A Bank of Mexico working paper suggests bonds issued in several emerging market economies have characteristics that make them vulnerable to runs.
"Financial stability discussions have mainly revolved around the degree of leverage in financial institutions," note Manuel Ramos-Franciay and Santiago García-Verdúz in Is Trouble Brewing for EMEs?
The paper aims to "shed light on the possible presence of run-like dynamics in the bond fund flows" to and from a select group of emerging markets by
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