Abstract

Bond markets play a critical role by assisting governments and firms in mobilizing financing for investment needs; helping governments and firms in obtaining financing directly from the market, thereby subjecting them to the discipline of the market as well as providing healthy competition for the banking system, and thereby reducing concentration of risk in the banking sector; and providing investors with access to diverse types of financial instruments in which to invest both directly and indirectly through mutual funds, pension funds, and insurance firms.

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