Measures suggested to guarantee corporate bond market’s stability

Several measures have been suggested at an online seminar held by the Government Portal on May 28 to help the corporate bond market maintain its stability and operate in line with the law to aid economic growth.
Some participants in the online seminar (Photo: VNA) ảnh 1

Some participants in the online seminar (Photo: VNA)

The corporate bond market is a big source of capital for the economy. In the latter half of 2022, a “psychological” shock was recorded in the private placement segment following many violations uncovered by authorities.

The Government, the Prime Minister, and management agencies have made many important decisions to stabilize the market, ensure its compliance with the law, and enhance people’s trust to support the economy.

Speaking via videoconference, Assoc. Prof. Dr. Vu Minh Khuong, a lecturer at the Singapore-based Lee Kuan Yew School of Public Policy, said to help enterprises avoid committing violations, their leaders should gain a thorough understanding of corporate governance, ensure legal issues and rescue response, and conduct annual audits.

It is a highly urgent need to build a foundation for a healthy financial system, he said, expressing his belief that the Government of the current tenure can manage to do that and view current challenges as a chance to make strategic determination to create a good foundation for the time ahead.

Prof. Dr. Hoang Van Cuong, Vice Rector of the Hanoi-based National Economics University, held that it’s now the time for increasing resources for businesses, noting companies are sourcing capital mainly from the corporate bond market and bank loans, and enterprises’ stable operations will help maintain macro-economic balance.

He added the bond market requires both capable stakeholders and a legal environment for an ecosystem. Facing the recent “bond crisis”, the Government has taken relatively timely and methodological moves to early prevent the situation from getting worse.

Suggesting ways for shoring up the market, Deputy Minister of Finance Nguyen Duc Chi said it is necessary to issue legal regulations on the bond market and make flexible and effective responses to changes in reality.

Recently, the Government issued Decree 65/2022/ND-CP and Decree 08/2023/ND-CP, helping bond issuers and investors to have legal tools and time to settle immediate difficulties in terms of money, liquidity, and collateral, among others based on the consistent principle of harmonizing interests and sharing risks.

Chi said bond issuers must be responsible for their obligations and commitments toward investors. State agencies need to monitor enterprises and the market to ensure that obligations are fulfilled in accordance with the law. Meanwhile, investors themselves should also adhere to legal rules so that the State can guarantee the market’s transparency as well as the rights and interests of all stakeholders.

Facing difficulties in the real estate market, the Government has taken many measures to assist bond issuers such as extending debt and tax payment deadlines and reducing lending interest rates. The moves have helped the corporate bond market regain stability, the official went on

At the seminar, participants also shared views on the stabilization of macro-balances and the results obtained so far. They perceived that the combination of policies on macro-economic governance, especially the harmonious use of fiscal and monetary policies and an expanded fiscal policy like extending tax payment deadlines, cutting down taxes, and reducing land rents, is critical to macro-economic stability.