Sequential development issues in financial sector. Past reform actions mainly took place within a single subsector (e.g., banking and non-banking, including insurance and pensions). The complex interrelationships among subsectors is a new issue that must be resolved. For example, the insurance sector has grown significantly, and life insurance is a new area of activity. But there are few domestic investment opportunities: there is no treasury bond market and a nascent capital market. The insurance industry and pension funds are both service providers and users of the financial market. Without deep and liquid investment markets, insurance and pensions are not sustainable. From a debt management perspective, external borrowing is not reasonable given opportunities for inexpensive financing. Establishment of a treasury bond market could enable the financial sector to support sustainable economic development, and should be considered by the government. The issue should be discussed through high-level policy dialogue.
Third Financial Sector Program - Subprograms 1-6