China's Money Market Fund Development Problems

The thesis introduces the connotation and characteristics of the money market funds(MMF),touches the development status and the operating mechanism of MMF .It also explores the reason for the rapid development of MMF in American ,concludes some useful management experience .In the end, it analyses the necessity , possibility and prospective refinements of developing MMF in china . under the current economic and financial environment , makes politic suggestions to the development of MMF in our country.MMF is a type of common funds, which invests in portfolios in money market. Some of characteristics of MMF are: high liquidity and safety, low risk and cost, stable price of certificate and open management. MMF in American was born under the condition that regulation laws existed in a large scale and interest rate fluctuated frequently .MMF has many advantages, it can meet different requirements from the investors .It also benefits a lot from the advanced money market of U.S.A .MMF has developed in such an amazing speed and become the main financial intermediary of America.Considering the present economic and financial environment, it is necessary and possible to develop MMF in china. MMF can stimulate the development of money market, capital market and the funds, help the reform of interest rate by market and the carrying out of monetary policy. It can also accelerate financial innovations, improve financial efficiency. Money market in today's china has wide development scope and bright future, the performance of the funds also set good foundation for MMF, and the reform of interest rate by market helps it a lot. The MMF is now facing with great social demands. Of course there are some drawbacks in the present financial market, such as the money market still needs to develop deeply, the performance and management of security investment funds (SIF) needs to be improved, and the personal credit system hasn't been really set up. All these will hold back the birth and development of the MMF in some extent.According to the above analysis, the author suggests china should make good condition for founding MMF in the following ways: accelerate the development of money market, enlarge the dealing bodies, enliven the market deals, set up sub-market of money market system, improve the service of financial intermediary and regulations of the authority. Stimulate the development of the SIF, enlarge its scale and innovate its categories, improve the inner organization of SIF, found mutual regulation levels. Innovate and reform the financial system steadily, set up personal credit system. Set up laws to organize it. In the end, the author suggests china's MMF should take a step-by-step strategy and set up effective risk management system in order to prevent the risk of MMF.