No less important, however, is the effect of the Treasury bill ceiling in checking the development of the money market as a substitute for banking intermediation. The absence of a deep Treasury bill market is one of the reasons for the spread in the unindexed localcurrency segment and for the absence of a market for short-term corporate bonds based on Treasury bill prices.
The upshot is that anyone depositing money in a bank receives lower interest, while borrowers pay higher interest. This does further-and quite superfluous-harm to the capital market and the economy. 5.