For these reasons, the development of a well functioning government bond market will often precede, and very much facilitate, the development of a private-sector corporate bond market…” (New Strategies for emerging Domestic and Sovereign Bond markets, Working Paper No.260, OECD Development Centre, April 2007) As regards, policy challenges in India, they may be similar to those identified by a recent report of the Committee on Global Financial Stability (CGFS).
“Three important policy challenges that remain are: to improve market liquidity of the new markets; to encourage greater private sector issuance; and to spread the risks of bond investment more widely.” (Financial Stability and Local Currency Bond Markets, CGFS Paper No.28, Bank for International Settlements, June 2007) Let me conclude with this optimistic note on the development of the corporate debt market also in India, sooner than the expectations of many in the financial markets.