Association of International Bond Dealers – Definition
The Association of International Bond Dealers (AIBD) is an organization that sets standards for bond dealers and regulates trading and settlement in the Eurobond market. Established in 1969, AIBD has been a self-regulatory organization at the fore-front of promoting ethical standards and good market practices in trade and settlement.
Today, the Association of International Bond Dealers (AIBD) is now called the International Capital Market Association (ICMA). This association provides standards on acceptable market practices and give appropriate regulations on equity issuance, debt issuance, repos, and other similar transactions.
A Little More on What is the Association of International Bond Dealers – AIBD
The Association of International Bond Dealers (AIBD) was established to foster better trading standards in the Eurobond market. AIBD, which has now been changed to the International Capital Market Association (ICMA) was formed in 1969 in Switzerland (Zurich). The membership of the International Capital Market Association (ICMA) as at present time has covered up to 60 countries who engage in bond transactions. About 530 financial institutions belong to this association.
In the Eurobond market, international bond dealers issue the Eurobonds, they operate as a syndicate where each bond dealer performs his functions. Aside from underwriting functions performed by members of the syndicate, these international bond dealers also trade global bonds.
The Association of International Bond Dealers (AIBD) was established at a meeting of the Eurobond market bond dealers in 1969. The United Kingdom approved the AIBD as a self-regulating organization for investment trading and settlement in the 1980s.
In 1992, AIBD has first changed the International Securities Market Association (ISMA) before its name was changed for the second time in 2005. This time, it was changed to the International Capital Market Association (ICMA). Given the increase in the membership of ICMA, it has different chapters in different parts of Europe, Asia, and Latin America.
Reference for “Association of International Bond Dealers – AIBD”
Academics research on “Association of International Bond Dealers – AIBD”
- On the static efficiency of secondary bond markets, Oxelheim, L., & Rafferty, M. (2005). On the static efficiency of secondary bond markets. Journal of Multinational Financial Management, 15(2), 117-135. The major strand of finance literature understands market efficiency through the market’s ability to process information into prices. Another strand of literature refers to the economists’ usual sense of the word, i.e., that markets ensure that resources are allocated to their most profitable expected use, and provide services at the lowest cost. This paper, deploying the second definition, suggests a concept of static efficiency, and claims this can also be seen as a measure of market quality. The paper develops a measure of qualitative static efficiency for bond markets built on four indicators: transparency, number of maturities and issuers, spread, and liquidity. Indicators of market quality should be easily accessible, and permit international and inter-temporal comparison. Using Nordic markets as case studies, we show that these markets became more efficient during the 1990’s, but that transparency of efficiency remains a problem. A number of measurement problems with the static efficiency indicators are discussed, as well as interdependence issues. The paper concludes with comments on future applications of the static efficiency measure.
- Internationalization spreads to securities regulators, Hawes, D. W. (1987). Internationalization spreads to securities regulators. U. Pa. J. Int’l Bus. L., 9, 257.
- Private-public puzzles: inter-firm competition and transnational private regulation, Mügge, D. (2006). Private-public puzzles: inter-firm competition and transnational private regulation. New Political Economy, 11(2), 177-200.
- The state, the City and the Euromarkets, Burn, G. (1999). The state, the City and the Euromarkets. Review of International Political Economy, 6(2), 225-261. The Eurodollar market, which was established in the City of London in the 1950s, can be considered the progenitor of the global financial system which exists today, for it marked the beginning of a movement away from the restrictions placed by the Bretton Woods system on international capital movements, and a return to the liberal internationalism and laissez-faire order of the private and central bankers that ended with the collapse of the gold standard in 1931. Explanations as to why this development should have taken place in London rely, for the most part, on two contending theses: (1) that it was the direct consequence of the market mechanism inevitably overcoming official obstruction, or ‘friction’; (2) that deliberate state action created the conditions which allowed the market to evolve and operate. Adherents of the former claim that the Eurodollar was the innovation of the City’s merchant and overseas bankers, looking to finance the rapid increase in international trade that took place at the end of the 1950s, in a world still constrained by the restrictions imposed as a consequence of placing the international economy on a war footing in 1939. Adherents of the latter claim that it was a direct consequence of deliberate action taken by the British state to re-establish the City of London as the world’s foremost international financial centre. This article, which is based on archival evidence and interviews with state and private sector figures involved in the development of the Euromarkets, argues that the City’s position at the centre of the Eurocurrency system was a direct consequence of it having evolved within an institutional framework established over 100 years earlier. This seeks to challenge simple state/market dichotomies and suggests that the origins of the Euromarkets can be better understood with reference to the ‘governance of regulatory space’- whether by states, markets or various associational forms. Only by examining the historical occupation of ‘regulatory space’ can we have a more realistic view of how financial innovation evolves.
- Eurobond financing bargains and the clientele hypothesis, Marr, M. W., & Trimble, J. L. (1993). Eurobond financing bargains and the clientele hypothesis. Journal of Business Research, 27(3), 201-214. According to the clientele hypothesis advanced by Kim and Stulz (1988), market imperfections may account for the significant positive abnormal returns associated with Eurobond issues during 1975–1985. As predicted, they found that Eurobond interest-cost savings during the period were positively correlated with the associated abnormal returns. Contrary to predictions, however, the savings were smaller than the abnormal returns. One explanation only partially explored by Kim and Stulz is the effect of regulatory differences between the domestic and Eurobond markets. We present complementary evidence suggesting that the clientele hypothesis appears to account for all but the largest abnormal returns, and that and a brief regulatory advantage in issuing Eurobonds in a volatile market could account for the larger-than-expected average abnormal returns.