On The Potential Demand And Impact Of Money - Market Fund In China

Money Market Funds (MMF) holds an important status in the fund industry, which boasts strong negotiability, high security and yield slightly over deposit. However, as a financial innovation in China, the development of MMF is devious and now it is troubled by low yield. What is the market potential of MMF in China becomes the focus of scholars and experts.Based on the rate of cash flowing out of deposit into MMF in the American market, this paper forecasts the potential demand of Chinese investors and finds that MMF has a great potential in China. Then the impacts of MMF on the banking, fund industry and financial market show that the development of MMF will contribute greatly to the development of the financial market. So it is beneficial to the reform of the financial mechanism in China. The whole study is concluded by suggesting some effective measures to solve the difficulties in the development of MMF and to further develop MMF in China.