Research On RMB Inter-bank Borrowing Market In China

Interbank borrowing market plays a unique role in money market and its development reflects the level of healthiness of money market even financial market. The linkage between domestic market and international market became tighter after the whole openness of Chinese financial market in 2006. Interbank market can be the breakthrough of the development of money market and the cause of financial crisis. Research on RMB interbank market is of great theoretical and practical significance.Basing on the fundamental theory of interbank market, this thesis analyses the developed interbank market in comparative method to discover the common ground. Then the thesis reviews the history of interbank market in China and analyzes its characteristics. RMB interbank borrowing market in China, which was formed in 1984 and made great progress during the latest 20 years, is the earliest subsidiary money market. However, it lags behind developed markets in many aspects, such as the structure of participants, and the organization and the supervision of market. The prominent problem is that the interbank rate hasn't been the benchmark of financial market and hasn't been an effective tool of monetary policy of central bank.In the last, the thesis designs the target model of interbank borrowing market in China and proposes several operational suggestions based on the fact of China. In-depth reform must be taken in the admittance criterion, the transaction mechanism, and the interest rate system, as well as the supervision of interbank market. A healthy interbank market grounds on the sound interest rate system and the rational interest rate structure. Therefore, the marketization of interest rate is indispensable to the soundness of interbank borrowing market. Only if the interbank rate works as the benchmark of financial market could be the central banking effective and transformation of the tool of monetary policy possible, accordingly the interbank borrowing market will develop quickly and realize the function in implementing the monetary policy of central banking.