Mumbai: The Sebi on Tuesday mooted the idea of floating a common BRICS bond market for the benefit of all the participating countries. Currently, the bond market in BRICS is at a very nascent stage with lack of enough liquidity and depth.
While addressing the conference on developing the bond market in BRICS organised by CII, U.K.Sinha, chairman, Sebi said that a proper consensus at the political level would enable the creation of an exclusive BRICS bond market.
“Political consensus has helped BRICS countries to come together and create a New Development Bank. Earlier, there was a proposal to launch an Asian bond market. However, it failed to take-off due to lack of consensus at the political level. Now, the time is ripe to think of a common bond market,” he said.
Listing out the challenges before the growth of a vibrant bond market, the Sebi chairman said the global macro prudential issues and international financial issues has emerged as a major concern for the domestic bond market.
“The financial markets are now beyond the control of national policy makers. The unconventional monetary policies pursued by various central banks across the globe have created havoc in the bond market.
“Even a mild sneeze from a central banker would result in wild fluctuation and volatility in the bond market,” he said and added that these policies have failed to yield the desired result.
Without naming any specific bank, He said, “They have pumped in $9 trillion into the system since 2007. Out of that, only about $1.8 trillion has gone for funding the corporates”.