Research On The Surplus Liquidity Problem Of Chinese Bank System

From 2006, the domestic financial experts and scholars started to pay attention to the d surplus liquidity which existed in the bank of system , the Central Bank also adopted the contracted monetary policy, raises the legal reserve ratio against deposits gradually. In 2007 , the Central Bank upward legal reserve ratio against deposits in nine times and achieves 14.5%, the financial institution loan basic interest rate also up to 7.47%, which explained that government's Decision-making body payed much attention to the surplus liquidity. Commercial banks absorbed massive fund, but simultaneously lacks the effective utilization channel, the too much liquidity causes price of investment raise, the interbank loan rate declines, the latent inflation risk enlarges, which did not favor the long-term stability development of our country economy our country economy. Then the phenomenon of surplus liquidity is the question which our country Bank system will possibly face for a long time, or the specific product under financial system reform background? If we allow the liquidity to be in flood and the property price soars, do our country will on the economical long-term murky road just like Japanese economical froth is disillusioned in the late 80s? What is our country's bank system true roots of surplus liquidity? How to solve the surplus liquidity problem? This article is in order to discuss these questions .This article firstly proposed the definition of surplus liquidity.Then through to analysis the targets of surplus liquidity, for example the difference between deposit and loan of commercial banks continually expanded, the money market rate declines, which explained our country bank system has the problem of surplus liquidity. Based on this article has analyzed the liquidity influenced too much to our country economical finance, so there were the challenge to commercial bank's management, and has enlarged the bank operational risk. The reason which produces the surplus liquidity , this article analysis from the interior and the exterior aspects, the internal reason are:the unbalanced domestic economy structure cause the foreign exchange fund to be excessively,high savings ratio which caused by the fast economy development in many years,the bank investment channel is restricted because the capital market is not developed,and so on. The external reasons are: the global surplus liquidity, the fund has mainly flowed to the developing country. In order to alleviate the liquity to be surplus, the central bank has released a series of measures including raised bank reserve rate against deposits, the deposit and loan interest rate, and opened market service and so on. But these measures played the limited role. In order to control the surplus liquidity effectively, guarantee economic develop healthy, stable, continually, fast, our government must have the short-term and the long-term measures. Therefore this article in view of the phenomenon of our country's surplus liquidity, proposed the several suggestions to control surplus liquidity, such as adjusted economic structure, increases invested channel of the bank funds, increase the direct financing to reduce the cost of fund, deepen finance reform , development capital market, and so on.