THE plan to deepen the domestic local currency bond market by allowing the public to trade government securities through the stock market should help address a weakness long concealed by the sovereign’s easy access to bank borrowings. Pakistan’s large government securities market lacks the depth and diversification needed to allow securities to be widely held, actively traded and efficiently priced. Banks, holding about 78pc of government securities with sovereign paper accounting for roughly 62pc of their assets, have therefore little reason to seek ‘riskier’ private borrowers. Consequently, small firms, farmers and potential homebuyers struggle to obtain credit. The proposed reforms recognise this structural weakness. More predictable and........

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