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.
Given such interdependence, it would make no sense to develop bond markets that go against market economy incentives. A diagnostic framework needs to be placed in this broad context if it is ultimately to produce the desired results. State of development LCBMs have developed rapidly in recent years. The domestic debt outstanding in emerging market economies amounts to $ trillion (end of March 2011).