What are the determinants of the liquidity of government bonds and corporate bonds?

1. What are the determinants of the liquidity of government bonds and corporate bonds? 1. Market Environment Financial instruments such as currency, national debt, corporate bonds and stocks constitute financial markets with different levels of risk, income and liquidity. 2. The issuer characteristics that affect the liquidity of corporate bonds mainly include the issuer's information disclosure, industry classification and credit status. 3. The characteristics of bonds that affect liquidity are mainly reflected in bond issuance mode, issuance scale, age, remaining maturity, coupon rate and bond complexity. 2. What are the hazards of insufficient liquidity of corporate bonds? 1, liquidity is extremely insufficient. The extreme lack of liquidity will lead to bank bankruptcy, so liquidity risk is fatal. But this extreme situation is often the result of other risks. For example, the heavy losses caused by a major customer's default may cause liquidity problems and people's doubts about the future of the bank, which is enough to trigger a large-scale withdrawal of funds, or cause other financial institutions and enterprises to freeze their credit lines in case of possible default of the bank. Both of these situations may lead to serious liquidity crisis and even bank bankruptcy. 2. The value of short-term assets is not enough to pay short-term liabilities or unexpected capital outflows. From this perspective, liquidity is a "safety mat", which helps to win time and mitigate the impact of the crisis under difficult conditions. 3. Financing difficulties. From this perspective, liquidity refers to the ability to raise funds at a reasonable cost. Short-term market liquidity shortage will lead to an increase in liquidity cost, and market liquidity will have an impact on the capital cost of all market participants. Market liquidity indicators include trading volume, interest rate level and volatility, and the difficulty of finding counterparties. The difficulty of financing also depends on the internal characteristics of the bank, that is, the capital demand and its stability in a certain period of time, the arrangement of issuing bonds, its own financial situation, solvency, market views on the bank, credit rating and so on. Among these internal factors, some are related to the bank's credit rating, while others are related to its financing policy. If the market's perception of its credit situation deteriorates, financing activities will be more expensive. If the bank's capital allocation suddenly increases, or the number of times suddenly increases, or unexpected changes have taken place, then the market view may turn negative. Therefore, the financing ability of banks is actually the result of the interaction between market liquidity and bank liquidity. Relatively speaking, there are many large private enterprises whose bond liquidity is even better than that of national debt. Although many state-owned enterprises have received strong support from the national government, if the state-owned enterprises themselves are in an embarrassing situation, the circulation of such bonds in the market will be affected to some extent, and the liquidity of bonds is extremely insufficient, which may directly lead to bankruptcy of enterprises.