Dissertation
Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Finance, banking system

Chinese interest rate market research

Author FanWeiDong
Tutor LiYang
School Graduate School of the Chinese Academy of Social Sciences
Course Finance
Keywords Interest Liberalization Saving Interest Money Market Capital Market
CLC F832.1
Type PhD thesis
Year 2002
Downloads 3947
Quotes 7
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The most striking event of the world economy is the wave of financial liberalization from the late of 70s to the early of 80s in twenty century. Interest liberalization is the core of financial liberalization because interest rate is not only the most important variable in financial system, but also the most fundamental variable in market economy. The socialist market economy would be deformity if there had no the market-oriented interest mechanism. Therefore, to study interest liberalization is equal to study financial liberalization, which also is the reason of interest liberalization becoming the world trend from later of 20 century.Interest market-oriented is also named interest liberalization in the theoretical literature, which means that interest do not determined directly by the money authorities any more, but by the supply and demand in markets. The aim of interest liberalization is not to adjust the interest level, but to reform the mechanism of interest reforming, and make it the accurate price signal in macro-economy.The aim of the interest control is to arrange the allocation of the financial resources, strengthen the safety of banking system, and improve the economic growth. Interest control in developed countries were derived from the Great Depresses in 1929. The United State had the <G-S Action > to regulate the saving and loan interests (called Q statute). Much the developing countries have controlled the interest to accumulate the lower cost capital to steer up the domestic economies since the world war II. The advantage of interest control has gradually decreased and exposed to risk since 70s or 80s in twenty century. However, the interest control did not reinforce the safety of banking system, but deteriorate the banking with financial innovation development. To make more impartiality competition for saving banks is to stir up deregulation of interest. Interest liberalization has become the inevitable road to develop the domestic economy for both developed and developing countries.Now, China has entry into WTO. We would meet with all kinds of problems, including the stability of interest, the independence of monetary policy and free flow of capital. The equilibrium of the three problems is quite important. If the three problems can not deal with simultaneity, there would have to make the choice. The much critical is to create a more market-oriented interest system. In general, it’s pressing to interest liberalization when China entry into WTO.Based on the Chinese interest liberalization, this dissertation retrospects the course of China interest liberalization, excavates the inner logic of China interest reform, analyzes the correlation and sensitivity between the interest rate and macro-economy target, indicates the currently nodusof China interest liberalization, and proposes the micro, market fundament and macro condition which need to be improved further. The main contents of paper are included as following:Chapter 1 and chapter 2 introduce the theoretic and practice of interest liberalization and the performance effect on economic growth. The first part propose that we do not to liberalize interest for interest liberalization, we need combine the characteristic of domestic to exert the interest effect by recommending the classic interest theory, financial liberalization theory and financial restraint theory. In order to make it clearly, we discuss the experience and lessons of interest reform in kinds of countries.Chapter 2 presents the effect of interest liberalization on the economy, and the saving effect, investment effect and resource allocation effect.The third chapter begins to study on the China interest liberalization. First, we make the judge of the course of interest liberalization, to point to that due to the difference of the scope among the economists that lead to the quite difference of the judgement. In this paper, we define the whole financial activity including the inter-banking market, financial market, and non-regular finance. According to this

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