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Tuesday, 23 April, 2024

Message From The Special Guest

Journalists play an impressive role in capital market reform process

Prof Shibli Rubayet Ul Islam, Chairman, (BSEC)
  08 Oct 2023, 00:00

I extend my heartfelt congratulations to THE BANGLADESH EXPRESS as it embarks on its remarkable 30-year journey. I am happy to learn that this newspaper has set commendable benchmarks in financial journalism throughout its history since 1994 through in-depth professional reporting and independent market analyses, conducting CAMEL ratings on 22 private banks, dialogues of CEOs on big banking topics through high-quality Special Publications and promoting digital finance, mobile banking and secondary market development in Bangladesh. I am absolutely thrilled to learn that THE BANGLADESH EXPRESS, in collaboration with BJFCIis going to organise a Dialogue of Bankers, Editors and regulators titled "THE BANKING & FINANCIAL SECTOR REFORM: THE ROLE OF MEDIA & PRESS FREEDOM commemorating this momentous occasion. As esteemed bankers from top financial institutions, influential newspaper editors, and key financial regulators will be coming together for a pivotal discussion, this event promises to be an exciting affair, complete with the release of Anniversary Publications, I hope.

The timing of this innovative initiative couldn't be better, as open and candid conversations often lead to the most transformative outcomes. In my capacity as a financial regulator, I am privileged to discuss the recent transformation of the country's capital market where the role of media and press was significant. The Bangladesh capital market was once characterized by significant volatility, marked by recurring periods of boom and bust that posed a destabilizing threat to the economy. Following a bullish trend throughout most of 2010, the Dhaka stock index plummeted by nearly half from its December 2010 peak, representing a staggering loss of approximately 22% of the gross domestic product (GDP) by October 2012. This market correction resulted in the evaporation of $27 billion in market capitalization, leading to bankruptcies, erosion of savings, and widespread job losses, triggering a wave of social unrest. The ensuing liquidity crisis escalated solvency risks, and concerns grew about a potential negative feedback loop from the financial sector to the real economy, with the possibility of the economy coming to a standstill.

However, that era has now passed. The country's capital market now stands on a solid financial foundation with an increased number of investors thanks to a series of reform measures and vigilant oversight over the last decade under the proactive leadership of Prime Minister Sheikh Hasina. This transformation is attributed to the listing of numerous corporations and the growing confidence of investors. Notably, journalists have played an impressive role in the reform process, as they have become well-informed, discerning sources of information, steering clear of fake news and unwarranted speculation, as underscored by Keynote Speaker Mr Faruk Ahmed.

However, a lot of things are yet to be done from a regulatory perspective. We are yet to develop a secondary bond market due to some existing policy measures like high-interest rates, lack of market awareness, presence of limited companies, and changing market circumstances. The process is progressing fast and financial journalists can play a pivotal role by acting as watchdogs, interpreters, and educators as well as uncovering misconduct and fraud, which helps maintain market integrity. Through insightful reporting and analysis, they can decode complex financial information, making it accessible to the public and investors, thereby promoting transparency. Financial journalists also serve as a bridge between market participants and the public, conveying essential information that influences investment decisions and market behaviour. In doing so, they contribute to market stability and investor confidence. Ultimately, their reporting guides market participants shapes public perception, and fosters a conducive environment for economic growth and development.

However, the role of information and the way it is reflected in the value of financial instruments has been long debated in the financial literature. The keynote speaker has addressed some crucial issues which should discussed by the bankers and the editors to improve the situation. For example, he rightly mentioned that fake news is now a more significant issue than ever due to the expansion of alternative news outlets and the use of social media. This development has created many concerns, particularly in the financial markets where the negative report has a big impact on small investors. Financial reporting, when inaccurate or misleading, can distort financial markets significantly. A single misinterpretation or a misleading report has the potential to disrupt markets, causing significant capital losses for countless consumers and small investors while jeopardizing the survival of businesses. False or exaggerated information can mislead investors, prompting irrational decision-making and market volatility. This distortion erodes trust and undermines the market's efficiency, potentially causing financial instability and significant economic repercussions. It's noteworthy that, under the current government, the majority of financial journalists are experiencing complete freedom in their financial reporting.

Bangladesh has undertaken significant strides in implementing reforms within its banking and financial sector, aiming to fortify investor confidence, mitigate financial risks, and drive sustainable economic growth. The government's unwavering commitment to nurturing a robust and inclusive financial sector is pivotal in fostering stability, attracting investments, and advancing the financial well-being of all stakeholders. In this endeavour, the press and media must assume a pivotal role as watchdogs, providing critical analysis, investigative reporting, and raising public awareness on financial sector issues. Collaboration between banks and media organizations, aimed at enhancing skills and mutual understanding while bridging communication gaps, holds the potential to yield tangible results.

Comments

Message From The Chief Guest / Fake news is a big threat in the field of Social Media Journalism
Dialogue of Bankers, Editors & Regulators / THE FINANCIAL SECTOR REFORM: The Roles of Media & Press Freedom
Is MFS really a game changer for poor?
Financial journalists should enrich their knowledge of financial matters
Media might be the key educator on crime risks, and informed consumers
Message From The Special Guest

Journalists play an impressive role in capital market reform process

Prof Shibli Rubayet Ul Islam, Chairman, (BSEC)
  08 Oct 2023, 00:00

I extend my heartfelt congratulations to THE BANGLADESH EXPRESS as it embarks on its remarkable 30-year journey. I am happy to learn that this newspaper has set commendable benchmarks in financial journalism throughout its history since 1994 through in-depth professional reporting and independent market analyses, conducting CAMEL ratings on 22 private banks, dialogues of CEOs on big banking topics through high-quality Special Publications and promoting digital finance, mobile banking and secondary market development in Bangladesh. I am absolutely thrilled to learn that THE BANGLADESH EXPRESS, in collaboration with BJFCIis going to organise a Dialogue of Bankers, Editors and regulators titled "THE BANKING & FINANCIAL SECTOR REFORM: THE ROLE OF MEDIA & PRESS FREEDOM commemorating this momentous occasion. As esteemed bankers from top financial institutions, influential newspaper editors, and key financial regulators will be coming together for a pivotal discussion, this event promises to be an exciting affair, complete with the release of Anniversary Publications, I hope.

The timing of this innovative initiative couldn't be better, as open and candid conversations often lead to the most transformative outcomes. In my capacity as a financial regulator, I am privileged to discuss the recent transformation of the country's capital market where the role of media and press was significant. The Bangladesh capital market was once characterized by significant volatility, marked by recurring periods of boom and bust that posed a destabilizing threat to the economy. Following a bullish trend throughout most of 2010, the Dhaka stock index plummeted by nearly half from its December 2010 peak, representing a staggering loss of approximately 22% of the gross domestic product (GDP) by October 2012. This market correction resulted in the evaporation of $27 billion in market capitalization, leading to bankruptcies, erosion of savings, and widespread job losses, triggering a wave of social unrest. The ensuing liquidity crisis escalated solvency risks, and concerns grew about a potential negative feedback loop from the financial sector to the real economy, with the possibility of the economy coming to a standstill.

However, that era has now passed. The country's capital market now stands on a solid financial foundation with an increased number of investors thanks to a series of reform measures and vigilant oversight over the last decade under the proactive leadership of Prime Minister Sheikh Hasina. This transformation is attributed to the listing of numerous corporations and the growing confidence of investors. Notably, journalists have played an impressive role in the reform process, as they have become well-informed, discerning sources of information, steering clear of fake news and unwarranted speculation, as underscored by Keynote Speaker Mr Faruk Ahmed.

However, a lot of things are yet to be done from a regulatory perspective. We are yet to develop a secondary bond market due to some existing policy measures like high-interest rates, lack of market awareness, presence of limited companies, and changing market circumstances. The process is progressing fast and financial journalists can play a pivotal role by acting as watchdogs, interpreters, and educators as well as uncovering misconduct and fraud, which helps maintain market integrity. Through insightful reporting and analysis, they can decode complex financial information, making it accessible to the public and investors, thereby promoting transparency. Financial journalists also serve as a bridge between market participants and the public, conveying essential information that influences investment decisions and market behaviour. In doing so, they contribute to market stability and investor confidence. Ultimately, their reporting guides market participants shapes public perception, and fosters a conducive environment for economic growth and development.

However, the role of information and the way it is reflected in the value of financial instruments has been long debated in the financial literature. The keynote speaker has addressed some crucial issues which should discussed by the bankers and the editors to improve the situation. For example, he rightly mentioned that fake news is now a more significant issue than ever due to the expansion of alternative news outlets and the use of social media. This development has created many concerns, particularly in the financial markets where the negative report has a big impact on small investors. Financial reporting, when inaccurate or misleading, can distort financial markets significantly. A single misinterpretation or a misleading report has the potential to disrupt markets, causing significant capital losses for countless consumers and small investors while jeopardizing the survival of businesses. False or exaggerated information can mislead investors, prompting irrational decision-making and market volatility. This distortion erodes trust and undermines the market's efficiency, potentially causing financial instability and significant economic repercussions. It's noteworthy that, under the current government, the majority of financial journalists are experiencing complete freedom in their financial reporting.

Bangladesh has undertaken significant strides in implementing reforms within its banking and financial sector, aiming to fortify investor confidence, mitigate financial risks, and drive sustainable economic growth. The government's unwavering commitment to nurturing a robust and inclusive financial sector is pivotal in fostering stability, attracting investments, and advancing the financial well-being of all stakeholders. In this endeavour, the press and media must assume a pivotal role as watchdogs, providing critical analysis, investigative reporting, and raising public awareness on financial sector issues. Collaboration between banks and media organizations, aimed at enhancing skills and mutual understanding while bridging communication gaps, holds the potential to yield tangible results.

Comments

Message From The Chief Guest / Fake news is a big threat in the field of Social Media Journalism
Dialogue of Bankers, Editors & Regulators / THE FINANCIAL SECTOR REFORM: The Roles of Media & Press Freedom
Is MFS really a game changer for poor?
Financial journalists should enrich their knowledge of financial matters
Media might be the key educator on crime risks, and informed consumers