Resurrecting the panda bond
Should the US issue panda bonds, as Guo Shuqing, the chairman of China Construction Bank would like to see? Much better, I think, to start with the World Bank and a few other habitual foreign-currency issuers before suggesting that the US break with all tradition and borrow in any foreign currency.
But yes, if the World Bank can start issuing in yuan, and if it can easily swap its obligations back into dollar Libor, as Guo suggests is possible, then that’s a great idea. A benchmark yuan yield curve would do wonders for increasing the transparency of Chinese capital markets.