Furthermore, a domestic bond market by itself need not necessarily address the fundamental issues of risk management and pricing of risk. On balance, the current realities would lead one to believe that the banking system will continue to be at the centre of the financial system in emerging economies.
In fact, banks are likely to have significant direct or indirect presence in the debt market as issuers, investors or underwriters. If the overall environment in the financial sector contains problems in pricing of risks by banks, bond markets too can suffer infirmities in pricing.