To develop a framework that defines uniform principles for all countries is a real challenge, yet it is crucial as a means of heightening the efficient deployment of TA resources. The question of what obstacles lie on the path to deeper LCBMs is not just about regulatory roadblocks or market infrastructure – which are among the usual suspects when evaluating such things.
No, it is important to see local bond markets not only in isolation but also within the overall context of the financial system. For example, a financial system with a decentralised banking sector might fully meet the financial needs of a decentralised economic structure and do so with minimum transaction and opportunity costs.