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Analysis of Foreigners’ Bond Investment Behavioral Changes Influenced by European Financial Crisis - Focusing on Variations of Different Maturity Bonds Net Investments -

  • Journal of Knowledge Information Technology and Systems
  • Abbr : JKITS
  • 2012, 7(2), pp.125-134
  • Publisher : Korea Knowledge Information Technology Society
  • Research Area : Interdisciplinary Studies > Interdisciplinary Research
  • Published : April 30, 2012

김경석 1,  박종연 2,  노승재 3

1외환은행
2우리투자증권
3글로벌가치창조연구소

Accredited

ABSTRACT

This research proved that when the credit conditions of financial institutions are worsening because of European financial crisis, the foreigners’ investments of bonds are reduced. After year 2009, when the European financial crisis is wide spread, the Euribo – OIS spread, which shows the credit crunch level of European financial institutions, has shown a strong negative relationship with foreigners’ total net investment. Especially, the foreigners’ net investments in 2-5 year maturity bonds have shown very close relationship with European financial crisis. The precedent research proved that foreigners’ bonds investment has shown different decision factors on each different term bonds. The analysis period (January 2009 – December 2011) of this research has proven different result compare to the precedent research of foreigners’ decision factors on different maturity bonds. This result implies that foreigners’ net investment decisions on different maturity bonds varied depending upon the market conditions. Based on these findings, the financial authorities should classify different phases depending upon European financial crisis and be prepared for foreigners’ drastic capital withdrawals because of deepening on credit strains of financial institutions. In addition, the financial authorities should continue strive to improve the foreign reserve soundness. And they should practice the aggressive smoothing operations in order to reduce the foreign exchange fluctuations to stop foreigners’ drastic capital withdrawals if the global credit strains recur.

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