Second, interaction between sovereign debt and monetary policy is an important determinant of market confidence. A comprehensive fiscal exit strategy should explicitly recognize the objective of a sustainable public debt ratio and policies that should underpin a fiscal adjustment path. Third, right balance between growth in the financial sector and real sector is important to prevent imbalances. Warning signals always flash before the crisis.
Chart 3: Investor profile of G-Sec market  BIS central bankers’ speeches  5  For diversifying the investor base, especially in context of calibrated reduction in mandated investments in form of Statutory Liquidity Ratio (SLR), there is need to focus on new investors, such as, pension funds and retail investors.