Legal System Of National Debt

The development of the market of national debt demands the perfection of legal system of national debt and optimizing the regulation of the market of national debt. There exist a complete legal system in the countries with large amount of national debt issuance, deep usage of national debt and advanced market system of national debt in order to secure the sound operation of the market. Despite a series of relevant laws and regulations regulating the market of national debt in China, the legal system of national debt is generally incomplete. We are lack of a uniform basic law of national debt and the practice of national debt is generally based on regulation, release and files of government sectors, leading to the problems such as multiple sectors issue regulations, the level of laws is not inherent and the contents and methods of legal protection are insufficient. In order to solve such basic problems as decentralized market of national debt, the national debt issuance of local government, insufficiency of liquidity, insufficient investor protection, systematic innovation is highly demanded.As for the structure of this article, it is divided into six chapters. The basic contents of each chapter are as follows:Chapter one provides legal explanation of national debt. Based on the analysis of the characteristics, category and function of national debt and the comparison between national debt and other general loans, this chapter discusses the legal character and legal relations of national debt. It then explores the operational system of national debt from the perspective of public and private law and economic analysis of law. The above analyses provide a preliminary condition for the perfection of the law of national debt. National debt differentiates from general loans in such issues as issuer, the system of issuance and trade, and the goal and principle of regulation. The law of government loan covers both public and private law factors and involves multiple legal relations. So, the legal regulation of national debt requires special legal rules and principles.Chapter two discusses the origin of the law of national debt. This chapter discusses domestic and foreign market of national debt and its legal system. It analyses the functional mechanism of law toward the market of national debt by comparative and empirical analysis and reaches the conclusion that law is the endogenous factor of the market of national debt. The market of national debt relies heavily on law in maintaining market information, transparency, investor protection, and efficient legal execution.Chapter three covers the decision making, decision mechanism, and method of the issuance of national debt. Since the issuance of national debt involves not only government financing, but also national fiscal policy and monetary policy, the legal system of national debt issuance should aim at not only rational control of the risk of national debt and reduction of cost, but also the coordination of fiscal and monetary policy. The article provides suggestions and measures on the perfection of the decision making system and issuance method of the issuance of national debt.Chapter four deals with the trading of national debt. Sound national debt trading market may safeguard the implementation and connection of national fiscal and monetary policy and improve the national finance system and enhance the innovation of financial products. There are problems of liquidity, safety, and investor protection in the market of national debt. This article explores the trading, settlement, trust, and repurchase of national debt and discusses the problems of decentralization and illiquidity of the market of national debt as well as the goal, road, and specific system design of the legal system of the trading of national debt.Chapter five discusses the regulation of the market of national debt. Based on the analysis the risk and regulation theory of the market of national debt and the causes of the incompleteness of the regulation of the market of national debt in China, it explains the causes of incomplete regulation. It proposes the goal, road, and basic principle of perfecting the regulation of national debt against the problems of multiple regulations of national debt and low regulation efficiency, and provide suggestions on the law making of the regulation of national debt.Chapter six discusses the incompleteness of the legislation of national debt. It suggests that the most important task is to improve the level of the law of national debt and establish uniform law on national debt. It also suggests to sort out the existing laws and regulations on national debt and establish a complete legal system of national debt. It proposes to set up effect analysis system, dynamic law and regulation examination system in order to safeguard the sustained effectiveness of the legal system of national debt. Must improve the relevant debt liability system, corrections of illegal acts, and ensure the healthy and orderly development of national debt markets.