Three major policy measures have been taken by the Central Bank to increase transparency in the government securities market. The matter was drawn to the attention of the Presidential Commission inquiring into the Treasury Bond issue yesterday.
Legal Counsel Harsha Fernando made the commission aware of these measures while referring to a press release issued by the Central Bank on May 3.
Fernando submitted the press release arguing against Deputy Governor Dr. Nandalaal Weerasinghe’s opposition to an auction method only system.
Fernando, quoting the Press Release said the Central Bank has taken a policy measure to give approval of the Monetary Board to launch a new monthly public auction system for treasury bonds.
Fernando questioned as to why Dr. Weerasinghe is supporting a direct placement method which has given room to discrepancies.
It was pointed out that another policy measure by the Central Bank, is the commencement of a Cabinet approved procurement process to establish a secondary market electronic trading platform inclusive of a new central counter party and clearing and settlement system.
The third policy measure is overhaul of regulatory and supervisory system with rules and principles to promote market discipline.