The Corporate Bond Market And Financial Ecological Environment In China

If the banking sector plays a key role in the early stage of the development of the economy, the importance of the capital market's contribution is growing with the development of the econnomy. As of the end of 2005, the balance of the bonds in the US market reached 253 44.5 billion us dollar, about 2.03 times of the US GDP among which the volume of corporate bonds is 5 027.3 billion, about 40.26% of the US GDP. In contrast, at the end of 2003, the balance of corporate bonds of our country counts only 3% of the GDP, which means that the this financial instrument contributes much less to the economy than it does in the developed economies.There is not well defined corporate bond market so far in our country. So this paper follows the guideline of the construction of the corporate bond market and tries to find out the optimal financial ecological system for corporate bond market with referal to current situation of the foreign corporate bond market.The main body of this paper goes as follows: in the first chapter, this paper looks back into the definition of the corporate bond, the funds-raising function of the corporate bond market and the theories of the corporate bond. In the second chapter, the author first introduces the definition of the financial ecological environment and the essentiality of the development of it. When analysing the foreign markets, the author picks the american and korean corporate bonds markets as examples, because the american market is the most developed market and the korean market is much alike to that in our country. During the analysis, the author finds out the following prerequisitives for a sound market: the effective benchmark riskless interest rate, diversity of the corporate bonds, institutional investors, and the liquidity of the market, the emphasis by the government upon the financial ecological environment of the...