The figure, which increased sharply in 2021, is modest compared with that of countries named in the report. By Q2/2022, the Chinese bond market had reached 36.8 percent of GDP, South Korea 86.6 percent, Japan 17.5 percent, Singapore 35.2 percent, Thailand 25.4 and Malaysia 55.1 percent.

The comparison may imply that the Vietnamese corporate bond market needs to be developed like other countries.

Allowing enterprises to issue corporate bonds helps enterprises diversify their capital mobilization channels instead of having to rely entirely on the banking system. Corporate bonds help ease the burden on monetary policy.

However, ‘one rotten apple can spoil the barrel’, affecting the development of the market. The Prime Minister pointed out that the bond market has recently witnessed hot development, causing risks. The major reason is that enterprises’ capital demand has increased rapidly, while banks tighten control over credit.

Meanwhile, the majority of investors are of small size and inexperienced, and a number of enterprises have violated regulations in bond issuance.

The Prime Minister affirmed that it is necessary to punish the violations and wrongdoings in order to develop financial markets in a sustainable way, and create a healthy  administration and economy, and protect authentic investors, financial institutions, banks and enterprises which are observing the law.

The Prime Minister committed to "protect the legitimate rights and benefits of people and related subjects in accordance with laws in any case; contribute to consolidating and strengthening the confidence of people and businesses, and accelerate rapid recovery and sustainable development".

The message also emphasized the conclusion of the government’s regular meeting in October 2022 – implementing the Party and State’s policy not to criminalize civil relations, but punish institutions and individuals that violate the laws, thus affecting economic security and the nation’s benefits.

This was the strong message of the government and Prime Minister to the National Assembly.

Many countries are facing negative developments in financial markets. The Korean government has announced a $35 billion program supporting the liquidity of the local corporate bond market.

In Vietnam, expert Nguyen Duc Kien recommended that the government instruct SCIC (State Capital Investment Corporation), DATC (Vietnam Debt and Asset Trading Corporation) and VAMC (Vietnam Asset Management Company) to buy bonds from individual investors along with SCIC, DATC and VAMC’s bond issuance plans to participate in enterprise restructuring.

This is a good solution worth considering in current conditions.

Tu Giang