As governments stepped up efforts to restore investor confidence in the global financial system, emerging-market bonds climbed, Bloomberg News reports.

The extra yield investors demand to own developing-nation bonds instead of U.S. Treasuries shrank 6 basis points, or 0.06 percentage point, to 5.27 percentage points in New York, according to JPMorgan Chase & Co.'s EMBI+ index. The so- called spread last narrowed on Sept. 25.

Emerging-market debt gained as Treasury Secretary Henry Paulson signaled the government may invest in banks as the next step in attempting to ease the credit crisis. Yesterday, the Federal Reserve, European Central Bank and four other central banks each cut their benchmark rates by half a percentage point. Brazilian and Mexican central banks yesterday sold dollars in the foreign exchange market to stem routs in their currencies.

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