debt securities

The term "portfolio analysis", introduced in the economic theory by Harry Markowitz, is not a new term in scientific literature. However, analysis and criticism in the papers of local and foreign authors are mainly based on the examples of developed capital markets. There are very few cases of application of the portfolio analysis in the domestic capital market. The focus of this paper is on implementation of diversification of the bonds on the Banja Luka Stock Exchange. Using Markowitz's portfolio selection, we will prove that diversification, including all limitations, is possible and applicable onto the domestic bonds in the capital market.

The term "portfolio analysis", introduced in the economic theory by Harry Markowitz, is not a new term in scientific literature. However, in the papers of local and foreign authors, analysis and criticism are mainly based on the examples of developed capital markets. There are very few cases of application of the portfolio analysis in the domestic capital market. The focus of this paper is on implementation of diversification of the bonds on the Banja Luka Stock Exchange. Using Markowitz's portfolio selection, we will prove that diversification, including all limitations, is possible and applicable onto the domestic bonds in the capital market.

In financial transactions today, a practice called “close-out netting” plays a key role in controlling and allocating risks.  If anchored in the parties’ chosen contractual language and recognized by law, close-out netting can circumvent normal bankruptcy processes by providing for the acceleration of mutual obligations and the efficient calculations and settlement of the net balance. When correctly implemented, close-out netting can eliminate the risk that arises under ordinary bankruptcy principles.

Despite the support for close-out netting by lenders, scholars, regulators, and policy makers, a few attentive observers of financial law argue that close-out netting is unsound, and the argument against close-out netting warrants further consideration.  Following a brief description of the landscape of international financial law, arguments in support of and against the practice of close-out netting can be examined.

These examinations show that, while there are legitimate arguments in favor of close-out netting, there are also real concerns about whether those arguments have been overstated and whether expansive legal protection for close-out netting exacts too high a cost.  Further, it becomes clear that these competing considerations cannot be mathematically weighed and balanced because the relevant risks are difficult or impossible to measure.  Therefore, lawmakers must exercise sound judgment regarding the degree of legal recognition that should be afforded to close-out netting.  There are no clear answers, but there are certainly red flags which should not be ignored.

The pandemic crisis produced by the SARS-CoV-2 virus, which causes the disease COVID-19, has rapidly exposed the limits of growth in neoliberal globalization, where financialization, far from bolstering global productive and commercial activities, has proved to be merely an efficient means of redistributing wealth towards society’s wealthiest members. The paralysis of global productive chains and trade is exacerbated by the deterioration of financial-market assets and loss of liquidity, high levels of corporate and private debt in industrialized countries, and the prominence of the informal economy in developing countries. Taken together, these phenomena will make it impossible for the global economy to return to the way it functioned before the COVID-19 crisis. With the hyper-crisis of modern-day neoliberalism exacerbated by the pandemic, difficulties in the supply chains essential to global trade have increased the risks of default on sovereign and corporate debt markets. For both sectors – government and business – a temporary restoration of liquidity is mediated by issuing higher volumes of debt. In a context of uncertain recovery, falling investment, failing businesses, mass unemployment, and declining family income, this will shift insolvency from the real to the financial sector. The potential way out of this hyper-crisis of neoliberal capitalism should be a new development strategy based on domestic markets, which globalization has relegated to niches of industrial specialization dictated by the need for supplies in highly profitable productive chains in developed countries. The current crisis, with its attendant high unemployment and increase in poverty, will define workers’ global struggle for better living conditions, thereby defining the structure of income distribution between capital and labor for the rest of the 21st century.

Este trabajo analiza la titulación de la deuda en los países subdesarrollados, en espe­ cífico, en Argentina, México y Brasil. Sostenemos que los tres países han tenido un incremento significativo en la emisión de títulos de deuda; sin embargo, la natu­ raleza de los valores emitidos es diferente en cada nación. En el caso de Argentina, el aumento de los valores de deuda internacionales en circulación tiene que ver con la emisión de títulos gubernamentales. En México, el incremento está más relacionado con las nuevas necesidades de financiamiento de las corporaciones no financieras mexicanas. Mientras tanto, en Brasil el incremento en la emisión de los títulos de deuda se debe a una combinación de ambos factores.