The eight local currency government bond markets in which the ABF2 invests have made significant strides since the fund's inception in 2005. Liquidity has improved considerably in most of these markets and yield curves have become increasingly reliable. These improvements may be traced to the following factors: (a) the growth of bond issuance in general and the consolidation of issuance in a few benchmark maturities; (b) the increase in market making activity, especially with the development of interdealer markets and the entry of interdealer brokers; and (c) the lowering of barriers to participation by non-resident investors. In each of these factors, the ABF2 project played an important catalytic role. But there remains work to be done. Depth and liquidity could still be improved by the development of repo markets and an opening up to non-resident investors. While issuance in the local currency corporate bond markets has surged, these markets have yet to develop active secondary markets. These markets would benefit from more effective market-making arrangements and the introduction of certain types of derivatives.