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The Complex of Measures to Enhance the Functioning of the Russian Market of Subfederal Bonds

Author: Yelena A. Yermakova, Yuliya V. Semernina and Aleksandr A. Shcherbakov


The issues related to fundraising through placement of subfederal bonds are becoming more and more relevant among the representatives of regional authorities. However, such factors as different investment preferences of issuers and investors concerning maturity dates of bonds, extremely low liquidity in the secondary market of subfederal bonds, insignificant credit spread to yields from government bonds and presence of alternative sources of funding with competitive cost constrain the development of the segment of subfederal bonds in the Russian bond market. The authors conclude that it is necessary to implement a number of state measures in the investigated segment of the Russian bond market. Particularly, the measures should include such as providing additional tax privileges for investors operating in the market, unconditional inclusion of all issues of subfederal bonds into the Lombard list of the Bank of Russia, and creating favourable conditions for refinancing against the security of sub-federal bonds in the transactions with the Bank of Russia. This set is to be combined with the measures at the level of the market participants, namely, ensuring an acceptable level of liquidity in the secondary market of subfederal bonds and improving the variability of parameters of bond issues.

Keywords: subject of the Russian Federation; bond issue; issuer; investor; subfederal bonds; bond financing; bank loan.

For citation:

Yermakova Ye. A., Semernina Yu. V., Shcherbakov A. A.  Povyshenie effektivnosti funktsionirovaniya rossiyskogo rynka subfederal'nykh obligatsiy [The Complex of Measures to Enhance the Functioning of the Russian Market of Subfederal Bonds]. Izvestiya Uralskogo gosudarstvennogo ekonomicheskogo universiteta – Journal of the Ural State University of Economics, 2016, no. 1 (63), pp. 23–33.