South Asian Bond Markets: Developing Long-Term Finance for Growth

The financial sectors in South Asia Region (SAR) are dominated by commercial banks, which account for the vast majority of the financial system’s assets. The domestic debt markets including the government bond and corporate bond markets are at an early stage of development and there are few institutional investors. In recent years, countries in SAR have attempted to develop local debt markets, although the pace of development remains uneven and slow due to many regulatory and institutional impediments. With the notable exception of India, governments in SAR have yet to implement measures required for the proper development of the domestic bond markets. The book will provide a comprehensive overview of the major bond markets in SAR (Bangladesh, India, Nepal, Pakistan and Sri Lanka) highlighting the areas which need further reforms. It is hoped that the book will contribute to our knowledge of bond markets in South Asian countries and create a broad based ownership of the recommendations made by the authors.

A deep, well-functioning domestic bond market is essential for sustainable development in South Asia. South Asian Bond Markets: Developing Long-Term Finance for Growth provides a comprehensive overview of the South Asian region s bond markets, drawing insights and contributions from key policy makers as well as practitioners. The book will greatly help supervisory authorities in the region to better understand the constraints in developing bond markets and implement necessary measures to develop a deep and diversified local bond market which can facilitate long-term finance for growth. --Dr. Joong-Kyung Choi, Vice Minister of Strategy and Finance, Republic of Korea, Former Executive Director of the World Bank Group

As emphasized recently by the Group of Eight, domestic bond markets remain a central piece of any sound financial sector reform and development strategy. By providing a funding alternative to bank financing, alleviating maturity mismatches, and diversifying risk, bond markets allow economies to attain a superior position on the frontier of risk-return trade-offs. South Asian Bond Markets: Developing Long-Term Finance for Growth provides policymakers and development practitioners with a lucid, well-focused analysis of the status of bond market development in the Subcontinent, and it offers a set of policy recommendations that will form the basis of the region s debt market development agenda for the foreseeable future. --Dr. R. H. Patil, formerly Chairman of the Indian Regulatory and Market Reforms for the Corporate Bond Market Committee, and currently Chairman of the Clearing Corporation of India Ltd and Chairman of the National Securities Depository Ltd.