In preparation for the introduction of real time gross settlement by the end of 2000, the Bank has been working hard on upgrading computer systems, and, at the same time, formulating new market practices together with market participants. In general, financial assets with low liquidity which are traded by a small number of investors in the market tend to show excess price volatility.
Therefore, making the government bond market more liquid and convenient for many diversified investors is essential to improve functions of both the primary and secondary markets. The importance of reforming the government bond market does not stop here. A highly liquid government bond market in which the market mechanism functions efficiently forms a basis for developing other financial markets.