Research On The Institutional Constraints And Institutional Innovation Of China’s Bill Market

China’s bill market is an important part of the money market. It plays an increasingly important role in easing the tension of company’s liquidity, improving the commercial bank’s asset structure and liquidity conditions and promoting development of social credit. However, at the same time, the China’s bill market is lagging behind the development. The institutional constraints and related institutional arrangements of bill market have increasingly become important issues in the theory and policy-making circles. Making deep study on the history and reality of China’s bill market from a system perspective, and thus testing the system performance of the China’s bill market, analyzing trends and changes in its future path, putting forward the innovative strategy, have important practical and theoretical significance.The development of China’s bill market has gone through initial development stage, standard governing stage, rapid development stage and innovation-intensive stage. At the same time, China’s bill market has obvious institutional constraints, and the function of bills market has not been effectively carried out. In the aspect of formal institutional constraints of China’s bill market, the existence of bill financing deficits, the discriminatory policies of market players, the lack of bills franchised companies and the development of bond and stock markets have institutional constraints on the bill market; In the aspect of informal institutional constraints of China’s bill market, the existence of the lag of credit environment, the unbalance of regional economic development, and incomplete development of market intermediaries have institutional constraints on the bill market. The causes are the path dependence of the bills market system, the defects of the top-down system supply model, the impact of sub-team action, the imperfect institutional environment and so on.The evidence on China’s bill market shows that, the stock market and bond market, as parts of the formal institutional constraints of the bill market, have limited institutional constraints on the bill market. The effect of bill market institutional constraints depends on the market itself, other main of financial markets and the related service institutions. From the perspective of trading volume, the development or the capacity of bill market has limited effect on the stock market constraints. Meanwhile, the stock market can affect the bill market, but due to the initial system environment of money market lagging behind the development of capital markets, it leads to the scale diseconomies of China’s bill market and makes the stock market have limited effect on the bill market constraints. From the perspective of transaction price, there is a certain constrain effect among the bill market, stock market and bond markets,and the effect between the bill market and bond markets is larger, while it is less between the bill market and stock market. This situation is mainly due to the different market participants.China’s bill market system has practical requirements for breakthrough of institutional constraints and institutional innovation, and its dynamic mechanism comes from the pursuit of economy scale, reducing of the transaction costs, accessing to potential profits, and promoting of the technological progress etc. Its main channels for change are breaking through the existing institutional framework through legal channels and private market channels. In the target of changing the bill market system, we should establish the bills system based on the non-sexual theory, and promote the bills market through the orderly development of financing instruments. On the path of institutional change of the bill market, the management should be in accordance with the progressive path of institutional change in the supply system, which spreads after the first pilot to enhance the testability and controllability of the institutional change.To meet the objective requirements of the development of China’s bill market, Based on successful experience in the development of the abroad bill market, from the level of formal system, informal system and implementation mechanisms of the bill market, this bill presents some policy recommendations on the institutional innovation of China’s bill market;(1) Strengthening the legal system construction of bill market;(2) Strengthening the infrastructure construction of bill market;(3) Expanding the varieties of bills;(4) Speeding up the construction of Credit Environment;(5) Strengthening financial regulation of bill market.