Imaginations On Building & Developing Municipal Bonds Market In China

Municipal bond is a very important finance vehicle of the capital market factors in developed countries as a part belongs to pubic debts of the local government. But it does not exit in capital market in China now. This paper analyses domestic political and economic situation, then prescribes how to build and develop municipal bond market in China as to satisfy the large volume need of capital and money to prompt the growth of capital market in China.First, it introduces some basic concepts and axioms on municipal bonds, and points out the credit of local government is the base of market, emphasizing it is a reflect of corporation, the uniting of trust obligation and bankrupt restriction and has strict choice. Then it gives a simple introduction on municipal bonds market in Germany, France, and Japan. Esp. the market in the USA. It point out that the essential of municipal bond is the problem on repaying debt and assuring to local governments, the key factor is to enhance credit through credit enhancement, the extrude specialty is its revenue of interest except from tax. After analyzing an obligation and revenue bonds, it studies the origination: its issue principal part, the usage of financing, investors and intermedium; the steps on the control of risk: the restriction on rights to creditor and the volume of debts; the special regulation department; the wide exertion of market and the clear duty system and guarantee on repaying. And then it lucubrates the system actuality of modern urban base establishment construct, points out the huge demand of financing thought civilization and the great abuse of financing system to base establish construction, such as the lack of transforming private money to it, the larger debt risk among the ulterior local government obligation. Then it construes the necessary from a view of perfecting the public finance between central and local government, prompting the reform on financing system; the feasibility from a view of the stabilization of macroeconomic and the development of capital market, so it analyzes the main obstacles thought issue body, assuring, interest rat, fluidity, tax on interest and debt scale. Finally, it discloses the imagination of municipal market of China in the head and concludes its base marketing, safety and solidity and legislation principals; stressing offering standard and the control of risk on credit and revenue, the admittance of issue body, the devise the impossible of the city of wuhan with the actual situation.