Central Bank: Six to encourage the development of bond market
People’s Bank of China Deputy Governor Yi Gang said Monday, despite the various types of corporate bonds in recent years that there had been some development, but the overall scale of development is still relatively small, for this six-pronged push from the corporate bonds market.
Yi Gang incisive out that the source of China’s company bond market lagged behind the development of an valued justification is that the risk of company bonds, disposal and organisation problems.
To this end, Yi Gang from the six environs recommended to enhance the scope for of disposal and organisation of risk, and endorse the development of company bonds, embracing advanced market transparency, fortifying the bonds of the principle information; to endorse the development of the bond grading instrumentalities, fortify the bond grading instrumentalities market positioning and the job of research; cultivate certified institutional investors, institutional investors play in the organisation of risk and distribute the threats and other advantages; to fortify market infrastructure, enhance the company bond issuance, underwriting, trusteeship and liquidation and other bonds .
He adjoined that market managers should be fortified, it is needed to avert over-regulation effecting from the fiscal sadness, the development of the market constraints and to avert over-confident that the market structure and company governance shareholder binding, primary to control is not in place.
Corporate bonds to raise long-term funds for the general public to borrow money, and from indirect financing such as bank loans compared to bonds form of direct financing such as lower financing costs and, therefore, more conducive to the development of corporate finance.
Yi Gang pointed out that the development of corporate bonds lagged behind the development of other financial markets, lack of direct financing of the development will not only result in the accumulation of bank risk and affect the stability of the financial system and financial markets will also affect the breadth and depth, limiting the market function and to further enhance market efficiency.