| The bond market usually includes the exchange market and the OTC market. At present, China's bond market is divided into the OTC market and exchange market. The trade volume of Inter-bank bond market accounts for more than 90% of the total bond market. Due to some historical reasons, China's inter-bank bond market and exchange bond market is still segmented. There are different groups of investors and the different trading mechanisms in the two markets. The bookkeeping systems are segmented. Regulators are also decentralized. Market segmentation has seriously obstacle the development of China's bond market. This paper focuses on the comparative analysis of different trading mechanism and the effect of market segmentation on the overall development of the bond market. In the empirical analysis, using some representative bond market transaction data and find the following conclusion: the yield to maturity of exchange market bonds is usually lower than the inter-bank market ones, but has more volatility. Both two markets react to the changes of the external financial environment synchronously and have mutual influence, but influence of exchange market is stronger. Based on these findings, some policy suggestions are proposed to the future development of China's bond market. |
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