Every time the stock market falls, the same question comes back. Who is responsible? Investors want answers. The regulator defends its decisions. Brokers point at policy, and policymakers point at the global economy. Each of them has a piece of the truth, and still nobody ends up accountable. Bangladesh’s market has been through crisis after crisis, and it has never quite won the trust of people looking to invest for the long term. Falling prices are not the real trouble, since markets fall everywhere. What wears people down is that each crash shows the same old weaknesses, and the reforms arrive slowly, if they arrive at all.
Start with the regulator. The Bangladesh Securities and Exchange Commission (BSEC) is there to protect investors, keep trading fair and hold the market’s confidence. Some of its most debated moves make me wonder whether it solves problems or just pushes them down the road. Take floor prices, which were meant to stop shares from collapsing. They did limit the drops. They also blocked price discovery, put off buyers and drained liquidity. A market where people cannot buy or sell freely may stay open on paper, but it has lost most of its use.
Good regulation takes more than emergency brakes. It needs rules enforced the same way every time, investigations done in the open and penalties that match the harm done. Claims of manipulation have to be examined without favour. When investigations end without anyone visibly answering for anything, the public stops believing in them. The 2010 crash is still fresh for many people here. Families lost real money, and the question of who answered for it has shaped how people see the market ever since. Rules that are never enforced are just promises on paper.
Listed companies carry their share too. Once a business takes money from the public, it owes more than the minimum filings. Shareholders should get accurate information, honest governance and a clear account of what happens to their money. Yet weak companies with patchy dividends and little transparency keep drawing speculators. A rumour can move a share price further than a balance sheet can. Insiders who know the truth profit from that, and newer investors pay for it.
So corporate governance has to be something companies actually practise, not a form they fill in. Directors should disclose the transactions that matter, protect minority shareholders and explain it when results change sharply. Financial statements should show a company as it really is. Regulators, for their part, should watch for odd trading patterns and conflicts of interest. If good companies find listing expensive, unpredictable or thankless, they will stay private. Then the market is left with few strong issuers, fewer places to put savings and less power to fund real economic activity.
The government has a large share of the responsibility as well. A capital market cannot grow where policy keeps shifting. Interest rates, taxes, monetary conditions, privatisation and the handling of state-owned enterprises all shape what investors decide to do. When rules change often, nobody can plan for the long term, because nobody knows how the next measure will affect returns.
The authorities need a clear strategy for the market and the discipline to hold to it when conditions change. Listing suitable state-owned enterprises, welcoming credible multinationals where it makes sense and getting financial institutions to coordinate better could all widen the choices for investors. But each step needs open procedures and sound economic reasoning. Listing companies just to stir up a brief burst of excitement would achieve very little. The goal is a market that sends savings to productive businesses, creates jobs and supports lasting growth.
The market’s own structure adds to the problem. Individual investors dominate in Bangladesh. Institutions are thin on the ground, and mutual funds and similar vehicles are small compared with what a mature market needs. So a rumour, a sudden announcement or a change of mood can send prices swinging far more than it should. More institutional investors, backed by professionally run funds and credible long-term strategies, would steady things. Those institutions would have to act independently, disclose their holdings properly and answer to the people whose money they handle.
Financial literacy matters just as much. Many people come into the market without knowing what volatility is, how diversification works, how to value a share or where investing ends and gambling begins. Some put in savings they cannot afford to lose, hoping prices will keep climbing. When the market turns, the insecurity that follows is real. Schools, universities, financial institutions and the regulator should all teach investors in practical ways. People need clear information that helps them weigh risk, spot misleading claims and decide on evidence instead of excitement.
Still, blaming small investors is the easiest answer and the weakest. Herd behaviour and unrealistic hopes do add to instability, but individual mistakes cannot explain every structural failure. Small investors cannot be expected to compete fairly when information is unevenly shared, enforcement is thin and wrongdoing goes unpunished. Blame should follow both the choices people make and the power they hold. Those who control regulation, company information and large pools of money should be held to the hardest standards.
In the end, no single group is to blame alone. Regulators, companies, policymakers, brokers and investors all push the market in some direction, though their responsibilities are far from equal. Reform has to reach the whole system. Regulators should enforce the rules they already have, evenly. Companies should tighten governance. The government should keep its policies steady. Brokers should hold to professional standards, and investors should treat risk with more discipline.
None of this will change the market overnight. Trust comes back through steady effort, progress that can be measured and a willingness to admit failure. Bangladesh does not need a stock market that never falls. It needs one where prices reflect credible information, investors are treated fairly, misconduct has consequences and capital can reach businesses that put it to work.
Every downturn should teach something, not just start another round of finger-pointing. If the same failures keep returning with no real correction, public confidence will keep draining away. The market will recover for good only when responsibility is more than a word spoken in a crisis. It has to show up in decisions, in enforcement and in reform of the institutions themselves.
Confidence will return when those holding power are ready to admit their mistakes and fix them. Until then, the question stays open, and ordinary investors will keep paying most of the price.
The writer is a capital market investor and vice president at the Bangladesh-American Chamber of Commerce USA Inc.
Views expressed are solely those of the author.
