ZCZC
BSS-40
BOND-MARKET
Experts for robust bond market in Bangladesh
DHAKA, July 26, 2018 (BSS) – A robust bond market can mitigate the potential maturity mismatch of a bank-dominated financial sector, reduce financial sector fragility and provide long-term capital for business investment more cheaply, observed speakers at a roundtable here today.
“A developed bond market helps avoid excessive dependence on banks and facilitates to diversify corporate risks beyond the banking system,” said Bangladesh Bank former Deputy Governor and Banking Reforms Adviser SK Sur Chowdhury.
He was speaking as the chief guest at the roundtable discussion titled “Development of Bond Market in Bangladesh” at the Bangladesh Institute of Bank Management (BIBM) in the city, said a press release.
SK Sur said the Asian financial sectors, including Bangladesh financial system, are heavily bank dominated, and as a result these are not well suited to finance long-term investments on a large scale as tenures of deposits of banks are usually short-term.
As Bangladesh economy continues its rapid growth, he said, it faces an increasing need for diverse and sophisticated financial services and risk management financial products, including financing for infrastructures.
“To meet this demand, the capital market of Bangladesh is still not sufficiently broad and deep enough,” he added.
He said there are already some signs of momentum for a secondary bond market in Bangladesh.
“A large number of commercial banks that have been struggling to fortify their balance sheets and improve their leverage ratios in line with the regulatory requirements issue corporate bonds in the private placement market,” he added.
BIBM Director General Dr Toufic Ahmad Choudhury presided over the discussion while BIBM Director (Research, Development and Consultancy) Dr. Prashanta Kumar Banerjee delivered the welcome speech.
Toufic Ahmad Choudhury underscored the need for coordination among the bond market, banking system and share market to solve the liquidity crisis in the financial sector.
Dr. Prashanta Kumar Banerjee said more securities should come in the Bangladesh bond for encouraging the investors.
BSS/PR/KUC/GA/1834 hrs