Signs of a maturing bond market

The bond market has been stress-tested, and is seeing structural strengthening

How worried should one be about the bond market? In a financial market that is constrained for capacity, the bond market was expected to step into the space vacated by the slow growth of government-owned banks. Further, given the economic necessity of longer-term funding, particularly for building physical infrastructure, where banks with their five-year loans were found to be inappropriate, it is expected to be a critical part of the desired financial architecture. However, with several defaults in the last nine months, some of them of the highest rated ‘AAA’ bonds, and a clear decline in risk appetite, as visible