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Possibilities of Sub-Federal Bonds Market in Russia

Author: Yury M. Chebotar

Abstract:

The paper considers the essence and concept of sub-federal bonds as one of the main sources of financing budget deficit and attracting financial resources to implement investment (economic and social) programs of government bodies of Russia’ subjects. The author presents the goal setting of issuing sub-federal securities in Russia and elaborates on the types of investment risks while issuing sub-federal bonds including credit and market risks. The paper researches the state of affairs in and peculiarities of the market of sub-federal bonds in the Russian Federation and formulates proposals on development of the Russian market of sub-federal bonds allowing for the detected problems and possibilities of restructuring regional budgets’ deficits on the basis of using debt-related financial derivatives.

Keywords: securities; stock market; sub-federal bonds; risk; budget; yield.