…..The Reserve Bank is now trying to put in place measures that will make it convenient for individuals to buy and sell gilts. However, this might take some time and might require the central bank to make sure that the public sector banks, which have built a fairly extensive branch network, use their distribution capacity to sell down government bonds without adding a steep bid-ask spread. There are also lessons to be learnt. The Reserve Bank had introduced in 1996 a network of small shops – called satellite dealers — to retail government bonds. The scheme had to be shut down in 2002 for a variety of reasons, including the fact that the market micro-structure was not evolved adequately to allow for retail participation……
Read...........
No comments:
Post a Comment