Second, the Government Securities market provides the backbone of most fixed income markets across the world since it helps pricing of various debt instruments through creation of a benchmark, enables a proper evaluation of risk and acts a conduit for convergence of interest rates in other markets.
In addition, the gilts market acts as the channel for the integration of various segments of the domestic financial market and help establish inter-linkages between internal and external financial markets. It is sometimes argued that it is not always necessary to develop a Government securities market.