In the second half of the 1990s, monetary policy considerations relating to the information content of the yield curve and concerns with the transmission mechanism of monetary policy must have added impetus to the development of debt markets. Recapitalisation of banks appears to have been the driving force in Indonesia. In Chile, the debt market developed mainly as an offshoot of pension reforms.
And the nominal wage adjustment that has taken place across the country has, among other factors, helped to close the current account deficit by more than 10 percentage points of GDP since 2008. It is no wonder that many observers have pointed to Latvia, a country that is outside the euro area, as an example to those that are inside.