Participants shared information on bond market development, and looked at obstacles to further progress. In the case of the five countries of South Asia - Bangladesh, India, Nepal, Pakistan and Sri Lanka - they sought to identify measures that could help them increase the availability of long term, local currency financing.
While many initiatives have been taken in Asia in recent years to create deep, liquid bond markets, the depth and maturity of such markets varies greatly, with countries in South Asia lagging counterparts in East and Southeast Asia. Typically, governments in South Asia have relied on bank borrowings and external aid as their main sources of finance in the past.
"Financial market diversification supported by well capitalized and judiciously regulated institutions has been at the heart of the tremendous growth that we have witnessed in East Asia," said Simon Bell, Sector Manager for the World Bank’s South Asia Finance and Private Sector Development group.
The Association of Southeast Asian Nations, along with Japan, the People’s Republic of China and the Republic of South Korea, has been at the vanguard of Asian debt market development and is now exploring an initiative for a regional bond market which could help cut dependency on foreign currency funds and eliminate currency mismatches that have been a problem in the past.
"A strong and vibrant bond market is a key factor for growth in an economy as it provides an important conduit for both government and the corporate sector alike to raise finance for economic activities," said Renato Limjoco, an ADB Lead Financial Sector Specialist.
