Research On The Credit Rating Problems Of Enterpris Bond Market In China

In China the development of enterprise bonds is far behind other financing channels f which was mainly due to the phenomenon of illegal fund-raising in the early 1990's when many local governments ignored the provisions of the country to take advantage of enterprise bonds. So the Chinese Government adopted a stringent regulatory measures on the enterprise bond market,when put the enterprise bonds market into a very vicious cycle of development. However, in recent years, government policy-oriented changes are taking place to develop enterprise bond market, due to frequently issuing good policies , enterprise bonds are likely to usher in a breakthrough development.However, the development of enterprise bonds credit rating as a key element in the development of enterprise bonds market is obviously insufficient, which did not reveal investment risk and lower credit asymmetrical features, let alone so that the issuance of enterprise bonds to reflect the interest rate on different ratings. As a result of the issuance of enterprise bonds is limited and has too many rating agencies, which induces a serious imbalance between supply and demand, intense competition in the market for credit rating agencies .The serious competitions result to meet the requirements of the bondissuers, so that the neutrality and objectivity of crediting agencies lost.Then I researched the characteristics and the status of credit rating and reasons behind the enterprise bond credit rating problems. Fristly from the system problems in the Primary market and secondary market of enterprise bond market, including the restrictions on the amount issued, interest rate controls, mandatory security system and the segmentation of liquidity market of bonds and so on . Then I further studied the problems of rating agencies and monitoring and punishment mechanism in credit rating system. Finally, from the perspective of the regulator to improve the proposal,I provide proposal to improve the enterprise credit rating system including strengthening of credit ratings, such as legislative and regulatory, for China's enterprise bond credit rating .