Development of the Bond Market in Bangladesh

It is a privilege to be here this morning at this pioneering event, and I would like to congratulate the Bangladesh Bank and the Securities and Exchange Commission for hosting the first-ever international workshop on the development of bond market in Bangladesh. Bond markets link issuers having long-term financing needs with investors willing to place funds in long-term, interest-bearing securitiBangladeshes. has both the issuers and the investors in place but it still has not been able to link them effectively through a bond market. The positive effect of developing a domestic bond market on the economy is well-known. On the one hand, bond markets are essential for a country to enter a sustained phase of development driven by market-based capital allocation and increased avenues for raising debt capital. On the other hand, the central position occupied by domestic bond markets in markedly increasing the resilience of a country’s financial system and insulating it against external shocks, contagion and reduction of access to international capital markets is established. Capital markets are essentially about matching the needs of investors with those that need capital for development. Bangladesh has no shortage of both such parties, a young and dynamic population that increasingly wants, and is able to, make provision for lifetime events, to save for children’s education, for the possibility of ill health and ultimately for old age and retirement. On the other side of the equation, Bangladesh has a pressing need for investment resources to bolster its stretched infrastructure resources, to build more power stations, bridges, ports and gas-pipelines to empower the people in the development of enterprise and the creation of jobs. Debt markets are an extremely effective mechanism for matching the long term needs of savers with those of entrepreneurs. Term capital is a precious commodity and it has been a frustration to see the process of long term