Research On Propelling Interest Rate Marketization In China

Interest rate marketization reform is the important content of the reform ofthe financial marketization, is also the trend of the times.At present,the loan o-ccupies most of Chininese financial resources,still determined by the central bank and submitted to the state council for approval, so interest rate is the lastbastion of reform.Theorists and the practical realm of interest rate marketization call is also rising, and in the policy level has been promoted to the agendamany times.From the current views, due to the financial supervision restriction and theenterprise internal governance structure, making the marketization of interest rate difficult to get into full play in the short term.In order to play the positiverole，interest rate reform as soon as possible, we need to improve the financialmarket development level, improve institution construction.In this paper, the transaction cost theory,the property rights theory and institutional change theory wii be used to elaborate this interest rate marketizationpath selection and performance. Furthermore, to observe and reflect the achievements of the reform of interest rate marketization in some typical developed countries.on the basis, we study Chinese interest rate marketization in the transition period.Ⅰ. Interest rate marketization research review and commentsThe domestic and overseas scholars about interest rate marketization reform theory research mainly focus on the marketization of interest rate risk,performance，market-oriented interest rate reform order and market-oriented interest rate reform way and the path. From different angles, scholars discusse some relevant problems and make a lot of achievements, has laid a solid theoretical foundation for our country to continue to push forward the market-oriented interest rate reform.However, there have been studies still exist deficiencies, for instance, have not builded institution of interest rate marketization institution theoryframework, have not set up institution quantitative index into effective line mathematica-l analysis, etc.Ⅱ. Interest rate marketization theory foundationFinancial repression and financial deepening theory which is put fowordby McKinnon and Shaw is the foundation of a developing country interest ratemarketization of financial reform. As China is a developing country, a significant feature is existing binary financial structure, new structuralism theory tell u-s that, you should consider the existence of informal market and the economyof conduction effect. In addition to having basic theory to support, the interest rate marketization needs supportive institution conditions, such as the developed financial market,complete financial safety net, etc.Based on the existing institution environment, the interests of all parties,to the interest rate marketization institution,demand obviously insufficient, therefore, our country should have achieved the performance in the reform of property right,and then open up market interest rates gradually.Ⅲ. Institution quality and interest rate marketizationThe quality of the institution includes the institution effectiveness and institution stability two-dimensional index, institution effectiveness measure institution on the quality of the reform, promoting effect on the stability of the institution to measure the quality of the institution in the reform process of steady economic growth role.Through the panel data model research, the better the institution stability is, the better its market-oriented interest rate reform is, the performance is better.The overall level of quality institution can significantly affect the speed of the market-oriented interest rate reform process and the effect of market-orientedinterest rate reform. On the basis of improving the property right institution quality level, the whole country financial institution environment quality improves,it will lead to the whole financial institution financial institutions fair and orderly competition, also helpful for structure adjustment.Ⅳ. Institution circumstance structure and the interest rate marketizationThe quality of the Institution includes two aspects,that is the institutionquality of property rights and institution circumstance quality,.Based on the analysis of last chapter, this chapter uses common panel data model,further analyse-s the institution environment variables in two types of countries.On the analysof panel cross section data of the variance in the regularity, auther uses the fixed effect model; the paper studys different institution of variable quality variance and the institutional variables in the reform. The variable intercept variablecoefficient model to reflect the individual cross section to intercept influence. The results of the study show that, the improvement of the credit control institution environment lays important effect to the level of financial repression so asto promote the improvement of the overall level of interest rates. Improve theoverall level of banking supervision, including prior prudential supervision, matter after timely correcting and timely disposal,to support the market-oriented inte-rest rate reform.Ⅴ. China’s interest rate marketization analysisAfter30years development,China’s interest rate marketization, although has made important progresses, but the institution change progress is slow, interest rate formation mechanism of interest rate transmission mechanism is not perfect,the interest rate marketization has no substantial breakthrough.The paper probes the new source:these problems is the unreasonable institution caused by the structure.Our country interest rate marketization exists mainproblems and obstacles which has market mechanism disorder,market main body disorder,financial market institution obstacles,financial supervision obstaclesand commercial bank pricing barriers, etc.Ⅵ. The practice and enlightenment of foreign interest rate marketizati onFrom the world, the countries which have successfully completed interest rate marketization,based on the different economic institutions, political institutions and cultural institution reform backgrounds, different starting points, all follow different reform pathes But, whether smoothly promote the reform of interestrate in the United States and Germany, or Reforms appeared again and againin Japan and South Korea, attached great importance to the macroeconomic stability, regulatory regime change,choose the right breakthrough, innovate financia-l products, improve the commercial bank’s pricing power.After many years ofdevelopment and reform, USA, Japan,South Korea and Germany, the interest ratemarketization reform have made remarkable achievements in the world, therefore, to further study the interest ratemarketization, sum up experience, can provide valuable enlightenments.for China’s interest rate marketization.VII．Measures and suggestions for promoting the interest ratemarketizationThe quality of the institution is an important variable quantity to determine the success of the interest rate marketization.To improve the quality of the institution environment, to ensure that the interest ratemarketization process plays a more important stabilizing effect, this chapter put forward Measures and suggestions: promote the innovation in financial products improve and perfect thefinancial supervision mode, eliminate binary financial structure, establish deposit insurance institution, eliminate the interest rate marketization institution obstacles,improve the commercial bank’s pricing power.