The most tangible and manifest evidence of market segmentation in India is the “dis-connect” between IRS, IRF and government securities markets as reflected in the IRS (bank credit risk) yields being 100 to 125 basis points below G-Sec yields and IRF yields (when last traded) being about 70 basis points higher than their fair value, signifying almost complete absence of arbitrage and thus a pernicious violation of the “no-arbitrage”, or what is the something as, the “law-ofone-price, argument” which, as the discerning audience is by now well aware, is the most fundamental basis of “fair value derivatives pricing”.
And Poland is a case in point of how not to get into difficulties in the first place: it is a country with relatively sound macroeconomic fundamentals, which has managed to avoid recession and preserve sustainable growth in recent years.