Actively Develop The Syndicated Loan Market In China

Syndicated loan is a burgeoning financing instrument in international financial market, which has been existed for a little more than thirty years. But it has satisfied the financing needs of modern economy, and become one of the most important financing instruments of large project financing. Syndicated loan has several advantages when compared with traditional bilateral loan. For example, it has longer maturity, larger credit amount, has considerable proceeds of fees, and convenient for disperse risks. If we can use syndicated loan as an effective tool to improve the commercial banks' and other financial institutions' ability to resist financial risks, we can surely improve the operation of the financial system in our country. Then we can assure the steadiness operation of the financial markets in our country.This paper tries to expatiate the development of syndication in China, which is the most potential financing tool and has a bright future. The author wants to enhance the native financial institutions' understand of syndicated loan, and to facilitate the development of syndication market in China. The paper contains four parts, it starts from the basic concepts and categories of syndicated loan, then comes to the market actualities and specific problems, at last comes to the countermeasures and suggestions to develop the syndication market of our country.The first part summarizes the basic circumstances of syndicated loan. Starting from the appearance and developments of syndication, this part analyses the participants, the characters and categories, the common processes, and other elements of syndication. At last the problems the secondary market of syndication has been expatiated.The second part analyses the actualities and new trends of syndication in international financial market. According by the public data promulgated by Loan Pricing Corporation, this part introduces the actualities and new characteristics of syndication in US, China and EMEA market, and the top ten leading banks in each market. The new characteristics of syndication includes more institutions take part insyndication, the competition of the role of leading bank becomes severity, the fluidity of syndication has been enhanced and so on.The third part firstly discusses the meaning of syndication in China, which includes facilities in resisting financial risks, the stabilization and healthiness of financial market and so on. Secondly, this part brings forward several problems that restricting the development of syndication in China.The problems mainly include four aspects. First, the restrictions in according laws, such as the forbidding to commercial banks of charging fees in loans. Second, the banks prevalently lack the consciousness to use syndication as a useful tool, and would rather to provide the whole share then distribute loan shares to other banks. Third, the lack of according market environments, such as free market, lack of professionals and so on. Fourth, besides the policy restrictions, the institutional investors haven't the strength to impel the development of syndication.The fourth part carries out several suggestions and countermeasures relevant to the problems in preceding part. First, the restrictions and laws should be modified to create favorable system environment for syndication. Second, reform the traditional examine and approve system in commercial banks. Third, create favorable market environment for syndication. Fourth, enhance the strength of institutional investors, and develop credit trade market and so on.