Template-Type: ReDIF-Article 1.0

Author-Name: Attila Becsi
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: becsia@mnb.hu

Author-Name: Gergely Bognar
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: bognarg@mnb.hu

Author-Name: Mate Loga
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: logam@mnb.hu


Title: The Growing Importance of the Economic Role of the Corporate Bond Market

Abstract: The role of corporate bonds has expanded globally in the past decade, as they are
an ideal financial instrument both for diversifying the liability structure of issuing
companies and managing investors' portfolios. An adequately developed, liquid
corporate bond market has a beneficial effect on the functioning and transparency of
the market mechanisms of the economy and can also strengthen the crisis resilience
of the financial system. Several studies have shown that - in addition to the normal
functioning of companies - the issue of corporate financing is also important in crisis
management, as uncertainty during a crisis has a negative impact on the liquidity of
bank lending, limiting companies' funding options. In such a situation, it is therefore
vital that companies can also rely on other forms of financing. Recognising this in the
aftermath of the 2008-2009 economic crisis, central banks in a number of countries
launched bond purchase programmes in order to start supporting the expansion of
the corporate bond market. Thanks to the Bond Funding for Growth Scheme (BFGS)
of the Magyar Nemzeti Bank (the Central Bank of Hungary, MNB), the Hungarian
corporate bond market now offers a realistic financing alternative to bank loans
for a wide range of companies.

Classification-JEL: G01, E52, E58, G15
Keywords: corporate bond market, asset purchase programme, economic and financial crisis, monetary policy
Pages: 5-37.
Volume: 20
Issue: 4
Year: 2021
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-20-4-st1-becsi-bognar-loga.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:20:y:2021:i:4:p:5-37.