A Study Of Financial Liberalization And East Asian Bond Market

When it comes to the reason why develop East Asian bond market, the Asian Crisis can not be ignored. The frangibility of East Asian economy makes people still flutter with fear. The experience of the past development was doubted, people pay more and more attention to the financial security.Currency mismatch and maturity mismatch are deemed to be the direct reason which caused the Asian Crisis. Earlier studies are blue prints which focused on how to solve these two problems. As the further studies going on, people find that the two mismatches are just the surface of things; there are other deep-seated issues which are the financial fragility caused by the incompleteness of finance market.As a result of the history, 8 economies of East Asia faced strict restrictions in the very beginning. The strict restrictions make those economies have to choose financial repression which is required by heavy industry. After many years, the disadvantages of financial repression are discovered; Innovation becomes the common sense of East Asia. Because of the path dependence, East Asia falls into"lock-in". How to break the"lock"is a big problem that must be solved.This paper follows this logic, expatiates the reason and representation of financial repression; and tries to explain how to break"lock-in", then analyzes the development of East Asian bond market and find out the shortage of East Asian bond market, f give the solution.