The Rule Of Law Logic For Interest Rate Regulation

Owing to the traditional research paradigm which is based on the single cognition about logical starting point of interest rate's own attribute is the price of the a loan, only deduced the legitimacy of interest rates liberalization but negated the government intervention, in fields of economics and law, lead to interest rates supervision has suffering from a logical doubt that originates from one-sided understanding of ontology attribute of interest rates. The logical doubt is also the root causation, which ascribes the distortion of interest rate to the interest rates controls of government in China. In the background of comprehensively promoting the rule of law and comprehensively deepening economic reform, and making the market mechanism play a decisive role in the allocation of resources and exerting the role of government perfectly, and interest rate market-oriented reform entered into a key period, correct the logical flaw results from the single cognition about the attribute of interest rate to confirm the truth of interest rate supervision has logical self-consistent which rooted to the ontology attribute of interest rates, not only is the theoretical foundation to guide the market palyers to correct understanding the interest rate supervision, but also is the times proposition about timely response to the question that whether the interest rates should be and how to regulatory supervision with the logic of the rule of law in the picture of interest rates marketization will have achieved.Through using the analysis framework of the social cooperation system, the research proposes a new concept of the “sociality of interest rates”, which refers to interest rates has the attribute of external tendencies and intrinsic nature that can affect the overall social ecology by the way of taking part into the macro and micro-economic life, and channel the loan capital allocation though the function of financial leverage. Based on this, the paper further put forward the concept of the “duality of interest rates”, which refers to interest rate has the property of organic integration with the “sociality of interest rates” and “the price of loan capital”. By probing the dialectical relationship between the “sociality of interest rates” and the “price of loan capital” embed into the property of interest rates, the paper points out that the “sociality of interest rates” is provisions of the limits of the role the “price of loan capital”, and that the “price of loan capital” also presupposes the boundary of the role of the “sociality of interest rates”, and further points out that the logical interosculation between the dialectical relations of the “duality of interest rates” and the legal relationship between “power to rights” and “rights to rights” under the picture of interest rate maketiziation, so that reveals that the law regulating the loan interest rate reflects the inherent requirements of the “sociality of interest rates”, and the autonormy about the loan rates from market plays reflects inherent stipulation of the “price of loan capital”. It is the inner mechanism of contradictory movement embedded into the “duality of interest rates”, both determined the regularity on the game relationships between the “power to rights” and the “rights to rights” tend to general equilibrium within the vision of interest rates, but also responded to the general knowledge of economics that the level of interest rates should remain general equilibrium to the average profit margin of the whole society, at the same time clarified the legitimacy of the interest rate supervision source from the philosophy of law. By the way of correcting the logical flaw resulted from the single cognition about interest rate's property fundamentally, the paper would open a new theoretical window to help us correctly understanding of the interest rate supervision. At the same time, The paper discusses the value dimensions of fairness, efficiency, freedom and security which embeds into all kinds of interest rates, and then points out that the contradictory movement within the duality of the interest rates and the dialectical relationship among the value dimensions united internally in the claims of the rules of law which maintenance of the balance game between the “power to rights” and the “rights to rights” and to guarantee stable operation of the system of social cooperation. Forthmore, the research puts forward to and discusses systematically the basic idea of the interest rates supervision.In order to enhance the viability of the interest rates supervision, and to avoid the drawbacks of traditional mode of interest rates control, the paper puts forward to and explains the concept of “general equilibrium interest rates interval” on the basis of assimilation of the general equilibrium theory. The research points out that the general equilibrium interest rate within the law and economics, at least two conditions should be met: First, can be in line with the inherent requirement from the “sociality of interest rates” which always requires the interest rates to fit the economic common sense and the general life rule of thumb about interest always comes from the profits within the lateral relations; Second, can be in line with the inherent requirement from “the price of loan capital” which main requires the interest rates fit to remain relatively balancing with the parameters about supply and demand and the risk premium of loan funds within a certain range of time and space on the vertical relationship. Furthermore, based on the height scarcity and highly significant role in enhancing the overall effectiveness of the system of social cooperation of the intellectual capital, the research proposes that the “general equilibrium interest rates interval” should be set up “exceptional interest rates” applied to the field of technological innovation, so as to “add a bunch of firewood of interest rates to the fire of genius”. In addition, the research considers that the law ought to urge the banking financial institutions to try their best to improve the effectiveness of serve for the real economy, and curb the bad behaviors of so-called financial innovation which grabs the super cooperation remaining by improving disguise the difference between deposit and lending rates. This chapter explains the concept of general equilibrium interest rate range, discusses the path of the rule of law about the interest rates supervision though administrative law, civil law and criminal law, and in particularly discusses the specific approach that achieves transparency operation of the interest rates supervision by reforming the powers positioning capability of the Monetary Policy Committee, as well as the configurations and coordination about variety of concerned powers among the interest rates supervision agencies. The research centers the thinking on giving financial capital incentives sourced from interest rates to service for the technology innovation and the real economy, and on the basis of proposed and explain the concept of general equilibrium interest rate range, discusses the path of the rule of law about the interest rates supervision though administrative law, civil law and criminal law, and in particularly discusses the specific approach that achieves transparency operation of the interest rates supervision by reforming the powers positioning capability of the Monetary Policy Committee, as well as the configurations and coordination about variety of concerned powers among the interest rates supervision agencies.The main body of the research can be divided into four chapters, in addition to the introduction.The section of the introduction defines in adbance the concepe of “the interest rates supervision” as well as its concerned concepts through the interpretation of the term “the rationalte in terms of the rule of law” and based on and clarified that the research object of the treatise is the interest rates supervision.(1) The concepts of “free interest rates” and the “interest rates administration” are side by side in rank but opposed in meaning on semantics. The concept of “free interest rates” means that the parties about the loan contract have the legal rights to engage loan interest rate fully based on their autonomy, the concept of “interest rates administration” mainly means that the central bank has the power to set up, adjust and limit the interest rate, and the administrative power of inspection and supervision of the implementation about the policy of interest rates, and includes judicial regulation to violations of interest rates law.(2) The concepts of “interest rates regulation” and “interest rates supervision” are side by side in rank but opposed in meaning on semantics, and both belong to the lower-level concepts of “interest rates administration”. The concept of “interest rates regulation” means that one of the administrative paradigms to interest rates which making direct intervention as the main way to manage interest rate level, including the central bank adjusts the interest rate of commercial banks directly, and the judiciary regulate directly to ceiling interest rates of loan though judgment. The concept of “interest rates supervision” means that one of the administrative paradigms to interest rates which make indirect intervention as the main way to manage interest rate level, including the central bank adjusts the interest rate of commercial banks indirectly, and the judiciary regulate directly to ceiling interest rates of loan by the way of judgment.(3) The concepts of “interest rates marketization” includes vicissitude course from direct intervention as the main way to indirect intervention as the main way to interest rates by government, but not the concept of “interest rates liberalization”,which the governments are completely laissez-faire market interest rates. In the mode of interest rates supervision, the main way of indirect intervention to interest rates by government is more in line with the inherent requirements of the rule of law, because it would releases biggeer freedom place for the market mechanism to play leading role, while retaining direct regulation to distorting high interest rates.The chapter one is that “the interest rates supervision: an era of proposition expecting logically self-consistent”. The chapter clarifies that the symbiotic relationship between the interest rates supervision and the interest rates markerization and their historical logic by examining the origin and transform about the rates supervision as well as its theory and practice concerned, and points out the deep contradictions between the liberalization of interest rates which based purely on price property of the interest rates and the historic thumb, the thumb of general life experiences as well as the economic common sense which is that the interest of loan sources from the profit of real economy inevitably. The core issue of the chapter revealed is that based on the single cognition to interest rate's price attribute, can only deduce the logical self-consistent theoretically of the freedom of interest rates, thus inevitably lead to the interest rate supervision encounter the logical difficult that source from the interest rate's own attribute. Simultaneously, this logic difficult is the fundamental cause which has led theorists to misunderstanding about the distortions of interest rates in China currently, and the deep motivation which has caused people to debate but no decision so far about usurious whether or not to be incriminated.The chapter two is that “the correction to logical starting point of the interest rates supervision: based on the analysis of the interest rate's own attribute”. Firstly, on the base of introducing the analysis framework of the “social cooperation system”, the thesis divides the market resources into four forms: natural capital, financial capital, common human capital and intellectual capital. The market players who participation of the social cooperation system are correspondingly divided into natural capital subject of rights, monetary capital subject of rights, the common human capital subject of rights and the intellectual capital subject of rights. The thesis assumes that the four categories of market players above would return absolutely to the “original position” of the “veil of ignorance”, and start negotiations for conclusion of the social contract about taking fairly part into the social cooperation system and distribution justly of their “cooperation surplus”. Under the condition of definition of the total amount of cooperation surplus, since the monetary capital players obtain the shares of the cooperation surplus by means of interest rate instruments, not only to be at stake with the other various types of capital subject of rights, but also to be closely related to whether the social cooperation system would be organized and stable warking, which is the cooperation surplus must rely on, so as to provide a theoretical possibility about finding and setting “a general equilibrium interest rates range”, and then to provide a thinking dimension for exploring the establishment of mode of interest rate supervision which can effectively prevent abnormally high or abnormally low interest rates that would bring about efficiency loss of the social cooperation system, while providing a path to in-depth research the ontology property of the interest rates through introduction of constructivist research methods. By introducing social cooperation system analysis framework, the chapter explains that the abnormally high or abnormally low interest rates would have become apparent or potential influence on the deserved shares from the cooperation remaining of the subject of rights on the concerned forms of capital and have to affect the justice about distribution and the opportunity that the realization of rights of the subject of different forms of capital must depend on, so that lead the social cooperation system to suffer from unnecessary risks. Then the chapter puts forward to and discuss the concepts of “sociality of interest rates” and “duality of interest rates”, certifies the legitimacy on the philosophy of law about interest rates supervision, corrects fundamentally the logical defects arising from the single cognition to the property of interest rates that looking the rates only as the price of loan, so that provides a new theoretical perspective for us to correctly recognize the interest rates supervision. At the same time, the corresponding relationships between the duality of interest rates and the value dimensions of fairness, efficiency, freedom and security which embedes into all kinds of interest rates were discussed in the chapter.The chapter three is that “the basic idea of the interest rates supervision: the thinking mechanism attention to the overall cooperative effectiveness”. Using analysis framework of the social cooperation system, and based on dialectical relationship of the double attributes embedded into the interest rate and the value dimensions of the interest rates, proposes and systematically discusses the basic ideas that the interest rates supervision should be followed as far as possible: the idea of substantial justice, the idea of social own department, the idea of multidimensional balanced, the idea of differential treatment, and the idea of risk prevention and control, tries to construct a kind of “thinking mechanism” to response to the question that how should government regulate supervision to the interest rates and avoid improper intervention.The chapter four is that “the systematically construction of the legal system about interest rates supervision”. The main content of this chapter is embodiment of the “duality of interest rates” and the base ideas of the interest rates supervision in the construction of legal system. Firstly, the chapter puts forword to and discusses the conception of the general equilibrium interest rates interval and its setting principles. Followly, on the basis of general equilibrium interest rates interval is proposed as a core tool of the interest rates supervision, and around the general idea about incentive of financial capital serve for the real economy, the paper discusses the envisaged scheme about the construction of the legal system for interest rates supervision. First, in the dimension of administrative law, authorize the powers of setting and adjusting of the benchmark interest rate and the powers of monitoring the level of market interest rates to the central bank by the way of legislation, strengthening the powers of inspection and punishment of interest rates violations of the CBRC, CSRC and CIRC, clarity of the powers of interest rates supervision of the local financial supervisory agencies, as well as establishment of a mechanism on sharing and communicating of the information on inspection and monitoring of the interest rates among the national statistical offices, the audit institutions, the judiciary and the local financial supervisory agencies. On the premise that authorize the powers about setting and adjusting of the benchmark interest rate to the Monetary Policy Committee, achieve transparent operation of the interest rates supervision through reform of the membership structure, voting rules, and information disclosure mechanism of the Monetary Policy Committee. Second, in the dimension of civil law, on the premise that all of the fees about loan except the principal are included into the interest rate range, clarity of that any loan practices in which the annualized interest rate overstepped the ceiling of the general equilibrium interest rate range are belonged to illegal behavior, and in such cases the borrower has right of recourse to the illegal interest charged by the lender. Third, in the dimension of criminal law, to update the outdated views which lopsidedly understanding of the tolerance of Criminal Law is narrowing the “penalties range”, Needs and social management functions from the social practice of criminal law, setting the usury crime promptly based on the social practice requires and the social governance function of criminal law, clarity of that the loan practices in which the interest rate more than the upper limit two times within the general equilibrium interest rates shall constitute a crime, and view the usurious lending practices in the field of scientific and technological innovation as the exception through setting exclusions. Moreover, by discussing the historical role of the British long-term regulation to usurious, the paper points out that strict regulation of usurious not only is an important measure in favor of technological innovation and development of the real economy in the long run, but also is in line with the requirements of economic laws and is conducive to the realization of social justice included in the contents of public services the government ought to provide. Finally, the co-ordination between the regulations about interest rates supervision and the relative economic laws related was briefly discussed in this chapter.