Interest Rate Market Conditions

Interest rate liberalization is the objective request for financial development. Since" World War II", whether developed countries or developing countries have gone through a course of system changes from interest rate control to interest rate liberalization mostly. Having passed the economic system reforms of more than 20 years, our country has already set up the economic system of the market tentatively. But reform in financial system lags behind relatively, interest rate is still under the circumstances that the country controls strictly. The lagging of the market-oriented reform of interest rate has already influenced the process of the economic system reform of our country. On one hand, our government faces the pressure of the freedom trade under the background of economic and financial globalization along with the development of integration with international economy and internationalization of trade and financial market. 0n the other hand, drawback of interest rate control exposed abundant day by day in accumulating. It is inevitable that current interest rate systems move towards liberalization in our country. Nevertheless, Interest rate liberalization is a two-sided sword. Review the consequence of that some countries implement the market-oriented reform of interest rate, some of them have really achieved the goal of improving resource distribution efficiency and promoting economic growth; But part of them have not promoted the economic growth, have caused the financial crisis instead. Why did the result far from each other appear in equally correct direction? Is there anything wrong with Interest rate liberalization theory itself or with concrete operation of reform? Need suitable condition in succeeding in advancing the interest rate to be market-oriented on earth? Go still one step further, how to reduce risk and which conditions are needed to create while the interest rate of our country is market-oriented? Analysis as to this has undoubtedly important reference meanings for interest rate liberalization of our country. For study and solve above-mentioned subject, this dissertation has observed the theory background of interest rate liberalization at first, think that interest rate liberalization can promote economic growth steady and high-efficiently. But because the assumption prerequisites of perfect competition and complete information of the traditional financial deepening theory are too strict, the theory needs to expand further while it is used to direct interest rate liberalization of developing countries. Developing countries should carry forward reform in the direction of interest rate liberalization, assimilate the rational composition in the different theory in manipulation, gain a clear idea of the conditions and mechanism in which interest rate liberalization play a fully role. Carry out relevant system arrangement, so as to reduce risk and realize financial deepening. On the foundation of the judgment, the dissertation continued having observed the practice of interest rate liberalization in various countries from two levels. One is the difference between developed countries and developing countries, which reflects the difference of difference kinds of economic entities; the other is the difference among developing countries, which reflects the difference of the consequence of the developing countries implemented the market-oriented reform of interest rate from the different initial conditions. Think that essential conditions are prerequisite when carrying out interest rate liberalization. This reform might confront difficulty or weaken efficiency if lack of a series of innovation of the relevant system. The successful interest rate liberalization needs certain macro & micro condition, at the same time, need to pay attention to reform opportunity and order .It was once a rational and essential system in the economic development of our country that the interest rate is controlled. With the deepening of market-oriented orientation of economy, it is inevitable on the interest r...