Study Of The Legal System Of Our Government Bonds

To build a united and centralized treasury bond market is an important part to develop socialist market economy and improve reform and opening of the capital market. According to the fact of Chinese treasury bond market, in this article, the author compares and analyzes the international securities markets, especially the legal system and supervised mode of securities markets in developed countries, and uses the successful experience for reference to create the legislation of Chinese characteristics treasury bond market. The author advises to construct and perfect the legal system of Chinese treasury bond in three aspects which are central governmental bond legal system, local governmental bond legal system and international dominative bond legal system, and to improve the reformation and development of Chinese bond markets by founding, perfecting, harmonizing, joining the laws and other ways to develop the social economic well and rapidly.The theory of treasury bond is the basis to guild the issue of governmental treasury bond and to study the legal problems of treasury bond. The classical economists, like Adam Smith, were not completely objecting to distribute the treasury bond, but opposing the government to contract the loan. Modern mainstream economists sure that contracting the loan plays an important role to develop the social economy, especiallyKeynes, whose theory on government bond was adopted by most governments of the world. James M Buchanan and other present economists doubt or oppose Keynes' theory, and this influences the distribution of government bond in some countries. Since the foundation of the People's Republic of China, raising the loan was thought as the product of capitalist because of the misunderstanding of Chinese economists. After the Reform and Opening, the right conception takes the place of the traditional idea, and it makes the development of Chinese treasury bond market getting back on its right track. Comparing with the developed countries, Chinese bond markets have made much progress, but the weakness do exists in several aspects, such as distribution, circulation, the business of market overt and supervision. Backwards, disseminating, lacking of coordination and without the ability of foreseeing are all the shortcomings of Chinese bond market.The legal systems of government bond in the different countries have their own features, but they have some common characters. Such legislation reflects the common rules of developing the government bond market. Furthermore, it provides much experience to improve our bond legal system. There are three representative legislative modes in the world, they are American mode or government centralized mode, British self-rule mode and compound mode. These different modes are the results of the transition of social institution, and each mode has its advantagesand disadvantages. With the social economic development, every regulation way shows the same trend. We should construct the self-rule regulation with the help of government centralized supervision according to the social fact and successful experience.In China, experts and scholars all agree with the legislation of government bond. There is disagreement in classifying legislation, gradual lawmaking or unitive mode among the scholars. In the author's opinion, for setting up a unitive, opening and healthy competitive bond market, we must constitute the law of government bond to regulate all kinds of problems concerning the government bond. This is the essential idea to build treasury bond legal system of Chinese characteristics. The character of government bond legal system is the union of acting law and compulsory law, the union of procedural law and substantive law. We should follow the rules like foreseeing, harmonizing, opening and operating. The government bond legal system should comprise four parts, distributing institution, circulating law, service rules and regulation institution.One of the inauguration of this article is using the concept of central government bond to replace the traditional concept of national debt. We should make laws on distribution, transaction, supervision and risk controlling to perfect the legal system of central government bond. The distribution law of central government bond comprises the legal normswhich are the scope of contracting a loan, credit grade agency, capital investment and its beneficial results. The transaction law should include transference and circulation, the rules of market maker, transaction on exchange and curb exchange, the exchange of products depriving from bond, and etc. We should constitute the operable institution and rules by legislating the rules and measures of risk controlling.Current Budget Law do not allow the local government to issue the bond, so it is important for the development and legality building of the bond market to break the rule. According to the situation of China, while enduing with the power of issuing the bond, the local government can issue the bond after being authorized by the central government. This should be the right way to distribute the bond for the local government. The law of issuing the bond comprises issuing, circulation and supervision. For the local governments, they must improve the corresponding work of amending the law, such as budget law, guarantee law, companies' law, securities act and other laws and regulations.International sovereign bond is an important part to open the capital market to the outside world. Issuing the international bond is meaningful, though it meets much challenge in cost and risk controlling. To inaugurate the international bond law, we must use the successful legislative experience of foreign countries for reference and harmonize the relationship between national law and international law. We shouldreinforce the legislation of risk controlling and regulation of international bond.To be a conclusion, the author advances several viewpoints on the legality building of governmental bond. Firstly, the author gives the idea to make Chinese bond law system. In addition, the central government plays the role of examining, approving and enduing the local government with the power of issuing the bond. Secondly, the author plans the regulation system of government bond according to the situation of China by setting up the supervision office which being affiliated with finance ministry. The Securities Regulatory Commission is responsible for the supervision of bond market. Thirdly, the author advances the solution to set up the canonical legal system of government bond by instituting the basic laws. With the help of basic laws, we should establish, amend and perfect the administrative regulations, department regulations and self-disciplines.