BIS Working Papers No 1075
Overcoming original sin: insights from a new dataset
by Mert Onen, Hyun Song Shin and Goetz von Peter
The working paper No 1075 is published in February by BIS (The Bank for International Settlements). The working paper introduces a new dataset on emerging market sovereign bonds, distinguishing between the currency of denomination and the residence of investors. This dataset is on long-term government bonds and provides a more complete coverage of bonds issued in domestic markets. Also it is documented several salient trends. While a preponderance of foreign currency bonds is associated with greater holdings by foreign investors, the correlation is weak at best. Over time, emerging market governments have enhanced their ability to borrow abroad in their own currency, reducing their reliance on foreign currency debt. In this sense, EME sovereigns have made progress toward overcoming original sin. Nevertheless, the greater role of market and duration risk and the activity of foreign non-bank financial intermediaries (NBFIs) mean that emerging markets remain subject to fluctuations in global financial conditions.
You can find the paper here: https://www.bis.org/publ/work1075.pdf
