ADB eyes bond guarantee fund to boost Bangladesh capital market
The multilateral lender also offered support in identifying a suitable government institution to implement and manage the fund, which is seen as a crucial step in building investor confidence in fixed-income securities.
The Asian Development Bank (ADB) has expressed interest in providing technical assistance to support reform initiatives aimed at strengthening Bangladesh's capital market, including the development of a potential bond guarantee fund.
During a meeting held at the BSEC office in Agargaon on 9 March, the ADB delegation proposed conducting a feasibility study to determine an effective model for a Bond Guarantee Fund, officials said.
The multilateral lender also offered support in identifying a suitable government institution to implement and manage the fund, which is seen as a crucial step in building investor confidence in fixed-income securities.
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The meeting was chaired by BSEC Chairman Khondokar Rashed Maqsood. The ADB team was led by Manohari Gunawardhena, senior financial sector specialist and mission leader, and included senior officials Mohammad Rashed Al Hasan and Azizul Quadir.
BSEC Chairman Maqsood shared the commission's ambitious vision to expand the capital market's depth, aiming to increase the market-capitalisation-to-GDP ratio from the current 10% to at least 40% within the next three years. To achieve this, the BSEC plans to conduct a comprehensive "Capital Market Diagnostic" to ensure long-term sustainable development.
The discussion also touched upon necessary tax and policy reforms to attract large-scale companies and institutional investors. The regulator emphasised its commitment to aligning the local market with the international governance standards set by the International Organization of Securities Commissions (IOSCO).
In the short term, the BSEC is focusing on digitalisation and automation to enhance transparency and accountability. Furthermore, a joint framework between the BSEC and Bangladesh Bank is being considered to encourage large borrowers to shift toward the capital market for financing instead of relying solely on the banking sector.
