How could South Asia benefit from regional bond market integration?
4. Latifah Osman Merican (Program Director, Financial Market Integrity) gave opening remarks touching on the main challenges and issues for countries in South Asia to further develop their bond markets. Main issues touched by her are as follows: i. The drive to develop bond market emerged, at least in East Asia, from fiscal deficit and the need as well as Government initiative to finance those deficits. ii. In South Asia also, a proactive Government initiative is required for proper development of the bond market and it cannot be left to private sector alone. iii. Government initiative and intervention is also required because there is close nexus between bond market and money market operations. iv. Development of bond market requires a cross cutting wide canvas of objectives, some of which may be conflicting with each other. It requires liberalization of foreign exchange regime at the same time maintaining stable foreign exchange market, broadening of investor base, developing seconda