Central Bank: Six to encourage the development of bond market

People’s Bank of China Deputy Governor Yi Gang said Monday, in spite of the assorted sorts of company bonds in fresh years that there had been some development, but the complete scale of development is still quite tiny, for this six-pronged force from the company bonds market.

Yi Gang sharp out that the origin of China’s business bond market lagged behind the development of an significant cause is that the risk of business bonds, disposal and administration problems.

To this end, Yi Gang from the six localities suggested to enhance the capability of disposal and administration of risk, and encourage the development of business bonds, encompassing expanded market transparency, reinforcing the bonds of the major information; to encourage the development of the bond ranking bureaus, reinforce the bond ranking bureaus market positioning and the function of research; cultivate trained institutional investors, institutional investors play in the administration of risk and disperse the dangers and other advantages; to reinforce market infrastructure, advance the business bond issuance, underwriting, trusteeship and liquidation and other connections .

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 incisive out that the development of company bonds lagged behind the development of other fiscal markets, deficiency of direct financing of the development will not only effect in the accumulation of bank risk and act on the constancy of the fiscal procedure and fiscal markets will in addition act on the broadness and extent down, limiting the market function and to farther enhance market efficiency.