The Failure Of The Banking System And The Corporate Bond Market Study

On the basis of summarizing theories relating corporate bonds, including the corporate structure theory, the financial intermediary and financial market theories, the author has proved the institutional roots for the bank system failure, brought forward some policy suggestions on developing corporate bonds. The author has also analyzed the bank failure of the South-East Asian countries which are characterized by monopoly of bank system when the financial crisis broke out in 1997 and the fast development of corporate bond market after 1997. Moreover, in the view of lower financial systemized risk and formulating the steady state financing structure, the author has stated trend of substituting bank loans for corporate bonds.Traditional financial intermediary theory believes that financial intermediaries especially bank intermediary plays more important role in corporate financing than the equity market. In the thesis, the author broadens the concept of personalized exchange, generalizes it as a spontaneous transaction based on the mutual understanding between trades. On the basis of personalized exchange, the author constructs an broader personalized exchange games model to prove the thoroughly failure of personalized exchange in the Townsend's incomplete information model by reference of context-specific model. Since personalized exchange is non-market non-publicly transaction, the transaction content between the traders and private conceal information, and there exists externality when exploiting and disclosing private information because information is one of public goods, so that personalized exchange has its defects as typical prisoners dilemma in information mechanism.Going with the width of property transaction territory, the transaction forms and contracts are more and more complex, potential traders can not identify his potential counterpart, as a result, it is necessary to substitute personalized exchange by impersonal exchange.However, the asset generalization of impersonal exchange such as bank loan may sunk to asset specialization, the re-negotiation and bargaining abilities of bank will be weakened, thus the problem of loan hostage rises. Furthermore, under the pressure of competence, banks may choose first move tragedy. Then, banks only have limited rationality, bank impersonal exchange has institutional defects, and financial crisis is inevitable. Case of WenZhou's underground finance, Case of Japan and Korea's master bank can all prove the conclusion.Comparing with bank financial intermediary mechanism failure which is characterized as loan information can not be priced and non-public transaction concealing private information can not be signaled, the author formulate a corporate bonds market rank-order tournaments by testifying sufficient statistics. Corporate bonds market can adopt continuous tournaments, traders increase and vote with feet. Corporate bonds market is similar as complete competing market, also can be called efficient market. Each corporate bond competes with each other, like listing on board, all history information, public information, inside information effect and reflect on price signaling, the information dimensions which the governance need is most small. It can be proved that corporate bonds governance mechanism is effective than bank's personalized exchange intermediary mechanism governance.The author use 3-party games model to analyze the stock market interest pattern, testify the stock market failure and particular press on stock finance, then perfect thelogic of excluding means.Furthermore, the author's whole scenery research on the bank failure of the South-East Asian countries which are characterized by monopoly of bank system when the financial crisis broke out in 1997 and the fast development of corporate bond market after 1997 has factual meaning to accelerate China's financial regime reformation which includes bank reform and multi-layers capital market build.In the end, the author gives some suggestions and viewpoints to the structure, latest develop...