Author(s)

Sun Jinchen

Corresponding Author

Sun Jinchen

Abstract

Perpetual bonds are generally issued by non-financial institutions as issuers in the inter-bank bond market. It is originated in Britain and widely used in Europe and America. Since 2013, China has gradually opened up the perpetual bond market. However, as far as the current market is concerned, perpetual bonds are still innovative financial instruments and have many problems such as the accounting treatment. In order to explore the adaptability of perpetual bonds as a new financial instrument in China's financial market, this paper studies and analyzes the development mode of perpetual bonds according to the current situation and relevant policies of perpetual bonds at home and abroad. In China, perpetual bonds play an important role in improving the capital adequacy ratio of banks, the asset structure of enterprises and the investment structure of investors. However, there are still some risks such as unclear policies, insufficient issuance examination and low awareness of investors. In the future, we should moderately encourage the progress of perpetual bonds and make corresponding adjustments to the risks according to China's national conditions.

Keywords

Perpetual bond, Asset structure, Swap instrument