The Importance of Derivatives Markets in Bangladesh

Bangladesh is one of the world's fastest growing economies. There are 4 types of financial markets in Bangladesh these are money Market, Taka Treasury Bond Market, Capital Market, and Foreign Exchange Market. However, there is no derivative market in Bangladesh. Derivative market increase the economic growth of a country. The author analyzed derivative market condition of Australia, Canada, Hong Kong, India, Japan, and USA and found that there is a positive derivative turnover over the years. If the capital market of Bangladesh want to be competitive with other emerging economies of India, Japan, Hong Kong, the process of progressive policy making cannot wait for our market players to catch up with their counterparts in more developed financial markets. So that our policy maker and regulators must initiate to establish derivative market in Bangladesh as soon as possible. We believe that financial innovation such as creating new market may have contributed to favorable conditions in our country and thus to strong economic growth and financial development for Bangladesh. The expansion of derivative turnover in emerging markets are faster than in advance economies.