Are Money Market Funds A Kind Of Quasi-Savings In China?

This paper studies if MMF has the quality of "quasi-savings" from the aspects of characteristics and scales. It compares MMF with comparable financial instruments to find out its characteristics of yield, risk and liquidity. It also adopts panel data model on the capital market price and scales of MMF to study the function of MMF as the production of reforming savings in China.The empirical results shows: (1) Trough studying the different with other comparable financial instruments, MMF has the characteristics of "quasi-savings", high-yield, low-risk, high-liquidity. And the liquidity pressure of MMF is well matched with the liquidity, so money in MMF is in a safe setting. (2)By F-test and the mixed effects model, a conclusion is drawn that there are many factors influence the scales of MMF, including the yield of MMF, the variance of MMF which has little influence, the yield of treasury market, changes of stock price which is a key factor. (3)The regression of panel data indicates the scale of MMF has positive correlation with the yield of MMF, the yield of treasury market, has negative correlation with change of stock price. Secondly, the reason of the relativity between stock price and scales of MMF indicates "substitution effect" exceeds "the gateway effect", when stock price increases; both effects do not work when stock price decreases in China. That is different from U.S.A. where "substitution effect" exceeds "the gateway effect" no matter the stock price is go down or up. (4)The reason of the relation between the stock price and the scales of MMF shows, are its newly coming and the disposition effect in stock market, so the "gateway effect" of MMF has been prevented we should popularize MMF and consummate its "quasi-savings". So, in our country MMF has the characteristics of "quasi-savings" but it isn't the "gateway" between money market and capital market. The function of "quasi-savings" needs consummate.