A Research On The Coordination Of China's Money Market And Capital Market

Finance is the core of the modern economy. A mature, well-developed financial system can effectively gather and allocate social capital, enhance the conversion efficiency from savings to investment and thereby promote the economic growth. Money market and capital market are the basic parts of the financial system. Whether it keeps coordinate development or not between them will directly affect the function of the financial system, even the sustainable development of the country.However, China has implemented a financial system, called separate operation and separate management,which hinders the communication between money market and capital market.This Leads to structural imbalance existing in China's money market and capital market.The degree of coordination between them is very low. Therefore promoting the coordination between money market and capital market has been the focus of current financial reform.And it's also the main research topic of this paper.In order to measure the coordination level between China's money market and capital market,this paper established an index system in Chapter 4.including the development indicators, structural indicators,Linkage indicators and functional indicators.Compared with the United States, Britain, Japan, Taiwan, Brazil,this paper found that the development of China's money market and capital market lags behind the economy, and there is a structural imbalance in money market and capital market;the linkage between them is not strong, too.Price signal transduction channel is not smooth; conversion rate of savings to investment, which is the function indicator, is too low. Analysis results of all the indicators show that the coordination between China's money market and capital market is still in a quite low level.Based on the research results in Chapter 4,this paper made a research on the path for the coordinated development between money market and capital market in Chapter 5.In Chapter 6, we focuses on the possible risk infections and spread between money market and capital market, then we give proposals on risk firewall construction.And Chapter 7 is the conclusion part in this paper.