摘要
Underdevelopment of bond markets is one of the factors contributing to the vulnerability offinancial systems in Asian countries. Due to over-reliance on bank loans, it has not beenpossible for savings in Asia to be invested directly in enterprises rather than being funneledto international financial centers in theU.S. and Europe and then back to Asia. When thereis a crisis, enterprises and financial institutions are faced with both mismatch in maturityof loans and mismatch in currency denomination in their funding positions. The risksinherent in the dual mismatches are sources of financial instability in Asia. Therefore therehas been a consensus among major Asian countries to foster Asian bond markets in orderto reduce these risks. For China, developing its domestic bond market has become animportant part of effort to participate in fostering Asian bond markets. Based on proposalsand recent development of Asian bond markets, this paper discusses the problems andchallenges faced by China in developing domestic bond markets.
