| Government cash management derived from America in 1970s andhad a history of over 20 years. Most developed countries develop anappropriate strategy to manage their government cash flows in acost-effective matter. But in developing countries such as China weakgovernment cash management is a common issue. In May 2004 theauthor was lucky to attend a research topic "Government CashManagement and T-Bills Operation", which is cooperated by the People'sBank of China and Chinese Finance Research Institute of SWUFE. Thisis why this thesis is written. There are four chapters in this thesis: Chapter I is "The theoretical foundation of government cashmanagement". It talks about concept, target, contents, significance ofgovernment cash management in order to give a general idea of it. Chapter II is "The international government cash managementpractices". It elaborates government cash management practices of U.S.A,U.K, Australia, New Zealand. The practices include four aspects: theframework of government cash management, the target of governmentcash management, the setting of Treasury Single Account and theoperation of government cash management. U.S.A: Firstly, opening deposit accounts in commercial banks. Atpresent, the day-end cash balance of U.S.A keeps at about US $5 billionin the Central Bank, while the remaining large amount of cash isdeposited in the "Tax and Loan Accounts" of the commercial banks.When the day-end balance of the account falls short, the U.S.A Ministryof Finance will transfer the deficit cash from the "Tax and LoanAccounts". When the balance shows surplus, the U.S.A Ministry ofFinance will transfer the surplus cash to the"Tax and Loan Accounts"togain interest income. Secondly, issuing T-bills every week according tothe forecast of treasury cash. U.K: Firstly, entering the money market to have daily operation. TheU.K Ministry of Finance opens deposit account only in Bank of Englandand keeps the day-end cash balance at the level of about 0.2 billionpounds. When the day-end balance of the account falls short, the U.KDebt Management Office (DMO) will sell out or repo its financial toolsto finance cash for the treasury. When the balance shows surplus, the U.KDMO will buy in or reverse repo high-quality financial tools to gaininterest income. Secondly, issuing T-bills every week to smooth thefluctuation of circulating volume of treasury cash. Chapter III is " The comparison and analysis of government cashmanagement modes". There are three kinds of government cashmanagement modes. In the first mode, the Central Bank serves as anagent of the Treasury. In the second mode, treasury cash balance isdeposited in the accounts of commercial banks. We call it " AmericanMode". In the third mode, treasury cash balance enters the money marketto carry on short-term investment. We call it "British Mode". Afterstudying those two modes the author summarizes two basic conditionsabsolutely necessary for government cash management: one is theestablishment of Treasury Single Accounts System, the other is theregular issuance of T-bills. Chapter IV is "The analysis of current government cashmanagement in China". According to two basic conditions mentioned lastchapter, the author studies the current situation of China. The thesisanalyses current treasury management system in China and then talksabout treasury management system reform in China. Next the authorstudies Chinese T-bills market and analyses why the issuance of T-bills isbaffled in China. At last, the thesis specially points out that the totalaverage treasury cash balance stands quite high in China. Chapter V is " The speculation of government cash management inChina". The author puts forward three ideas in this chapter. The first ideais that the huge amount of surplus treasury cash may enter money marketto buy in financial tools. The second idea is that we should implementbond balance control and make amendment to Budget Law for theestablishment of T-bills market. The third idea is that we also shouldestablish coordination mechanism be... |
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