Research On The Impact Of Regulatory Policies On Corporate Bond Credit Spreads

The corporate bond market is an important part of my country’s capital market.In recent years,the corporate bond market has developed rapidly.As of the end of 2020,the stock size of China’s corporate bond market has reached 29.16 trillion yuan,exceeding the stock size of the national debt market and the financial bond market.Therefore,financial regulators are obliged to promote the rapid development of the corporate bond market.At the same time,due to the continuous occurrence of credit events in my country’s corporate bond market in recent years,the regional financial market has malfunctioned after the contagion of credit default risks.In this regard,financial regulators have strengthened supervision to maintain the healthy development of the corporate bond market.However,classical economic theory holds that government regulation is not a panacea.In the process of trying to make up for market failures,government regulation itself has limitations,which can lead to "government failures".Similarly,in the process of strengthening corporate bond market supervision,financial regulators may also encounter problems such as "insufficient supervision" or "excessive supervision",which will inevitably lead to the loss of corporate bond market efficiency and social welfare.The credit spread represents the financing cost of the company’s bond issuance,and reflects the risk compensation given by the issuer to investors.However,some companies are unable to repay the principal and interest at the promised interest rate,resulting in the phenomenon of default causing regional credit risk fermentation,undermining financial stability,Increase financial security risks.To this end,the regulatory body has issued relevant policies to restrain the corporate bond market.What effect will the introduction of regulatory policies have on corporate bond credit spreads?The research finds: 1)During the inspection period,the tightening of corporate bond regulatory policies will have a significant negative impact on credit spreads;2)According to the nature of the issuer,the tightening of corporate bond regulatory policies is more important than that of non-state-owned enterprises.The negative impact of the credit spread of state-owned enterprises is greater;3)According to the issuer’s credit rating,the negative impact of the stricter corporate bond supervision policy on AA and below is greater than that of AA+ and above;4)The stricter corporate bond supervision policy is in the Different regions have different negative effects on credit spreads.The negative effect is the most obvious in the eastern region,followed by the central region and the weakest in the western region.5)The higher level of regional financial development will strengthen the negative impact of stricter corporate bond regulatory policies on credit spreads;6)The strong financial resources of local governments will promote the negative impact of tighter corporate bond regulatory policies on corporate bond credit spreads.Based on the research conclusions,the following suggestions are put forward: 1)The regulatory agency should realize the unification of the corporate bond regulatory system as soon as possible;2)The regulatory agency may consider using the regulatory policy as a tool to regulate the issuance rate of the corporate bond market;3)The regulatory agency should implement the "relaxation while moderate";4)Bond issuers should adopt reasonable financing methods;5)Investors should plan investment plans reasonably.