, particularly, with the emergence of insurance and pension funds as a “ durable ” investor class for the longterm securities. this became possible due to the sustained efforts devoted to elongation of the maturity profile of government securities. corporate debt market the development of a corporate bond market in india has lagged behind in comparison with other financial market segments owing to many structural factors. while primary issuances have been significant, most of these were accounted for by public sector financial institutions and were issued on a private placement basis to institutional investors. the secondary market, therefore, has not developed commensurately and market liquidity has been an issue. the government had constituted a high level committee on corporate bonds and securitisation ( patil committee ) to identify the factors inhibiting the development of an active corporate debt market in india and recommend necessary policy actions. the committee made a number of recommendations relating to rationalising the primary issuance procedure, facilitating exchange trading, increasing the disclosure and transparency standards and strengthening the clearing and settlement mechanism in secondary market. the recommendations have been accepted in principle by the government, rbi and sebi and are under various stages of implementation. the two stock exchanges, namely, the bombay stock exchange ( bse ) and the national stock exchange ( nse ), as well as the industry body fixed income, money market and derivatives association of india ( fimmda ) have since operationalised respective trade reporting platforms. while all the exchange trades in corporate bonds get captured by concerned exchange ’ s reporting platform, otc transactions can be reported on any of these platforms. the aggregated trade information across the platforms is being disseminated by fimmda on its website. bse and nse have also started order driven trading platforms in july 2007. in practice, however, trading still continues to be largely otc. sebi has also implemented measures to streamline the activity in corporate bond markets by reducing the shut period in line with that of g - sec, reducing the size of standard lots to rs. one lakh and standardising the day count convention. further, to streamline the process of interest and redemption payments, electronic clearing services ( ecs ), real time gross settlements ( rtgs ) or national electronic funds transfer ( neft ) are required to be used by the issuers. further progress is anticipated in regard to rationalising the primary issuance procedures, which is a critical step for moving away from the pre - dominance of private placements. to

the economy is to return to a higher path of sustainable growth and development. these are the correction of macroeconomic imbalances, which i have often characterized as the need to live within our means ; the need to respond to, and exploit the competitive forces unleashed by globalization ; and the deleterious economic effects of population ageing and of environmental degradation. these challenges are by no means unique to malta. economies all over the world at different stages of development are similarly affected. they can, and must, therefore, be transformed into opportunities, because economies which are more successful than others in overcoming them will enjoy a significant competitive advantage. in malta ’ s case the task is particularly difficult because all of these issues need to be tackled at the same time. indeed, undue postponement of the necessary reforms could have serious consequences. the correction of macroeconomic imbalances the maltese economy has been devoting far too many of its relatively scarce resources to consumption. household and government consumption have increased steadily over the past decade from 80 % to 85 % of gdp. the household savings rate has meanwhile declined from almost 16 % to around 1. 5 % of disposable income during the same period. these trends are a source of concern. first, because a reduced savings pool will compromise future economic growth by curtailing investment. indeed, the share of resources devoted to productive investment has shrunk from almost 30 % a decade ago to just over 20 % today. second, because excessive consumption threatens the sustainability of the economy given the high import content of domestic expenditures. the balance between exports and imports of goods and services has been consistently negative over the past decade, averaging 8 % of gdp. while in past these deficits have been made good through inflows of capital from abroad, there is no guarantee that external imbalances on this scale can persist without posing a serious threat to the country ’ s external reserves and, ultimately, to the maltese lira. and may i at this point remind you that the low and predictable inflation we have experienced in recent years is largely attributable to the pegged exchange rate regime. this has also significantly reduced pricing risks for exporters and investors. it should, therefore, be clear that undue and sustained pressure on the reserves would evoke a monetary policy response which would have pervasive repercussions. there is no doubt that a primary factor behind these macroeconomic imbalances is the state of public finances. malta ’ s fiscal