Research On Risk Management Of Offshore RMB Bond Market

In June 2007,the people’s Bank of China and the State Development and Reform Commission jointly issued the Interim Measures for the issuance of RMB bonds in the Hongkong Special Administrative Region by domestic financial institutions,allowing domestic financial institutions to issue RMB bonds in Hongkong,opening the prelude to the issuance of the offshore RMB bond market.In February 2010,the Hongkong monetary authority allowed Hongkong local and overseas enterprises to issue RMB bonds in Hongkong.The development of the offshore RMB bond market has been greatly promoted by the relaxation of regulation.The issuing scale of offshore RMB bonds has increased from 10 billion yuan to the highest of 197 billion yuan,and the scale growth is nearly 20 times.However,with the gradual expansion and rapid development of the offshore RMB bond market,the problems of the offshore RMB bond default,the lack of liquidity and the lack of effective rating mechanism are gradually emerging,and an effective risk management mechanism is urgently needed to deal with the growing risk of the offshore people’s currency bond market.This paper first studies the current situation and characteristics of the offshore RMB bond market from the perspective of theoretical analysis;analyzes the main risks in the offshore bond market and the causes of the risks;secondly,analyzes and summarizes the problems of risk management in the offshore RMB bond market in Hong Kong;finally,how to prevent the offshore RMB bond market in Hong Kong.This paper suggests that we should learn from the experience of mature international markets,establish a scientific risk management system,and strengthen the risk identification,evaluation and control of the market.