China's Money Market Fund Development

Originating in the United States, Money Market Funds (MMF) has been developing for almost forty years. MMF enjoys significant status in the fund market due to its' advantages such as relatively stable yields, low investment risks, high liquidity and check signing functions. Based on the conditions of MMF in America, this paper analyzes the major reasons that the MMF has developed in America, and then describes the functions of MMF to the finance systems of China from three aspects including finance institutions, finance market and macro-mechanism. Secondly, the paper analyzes the developing money market and the marketing interest system, and deems that there is possibility to develop MMF in China. Lastly, this paper analyses the main reasons that restrains the developing of MMF in China, meanwhile puts forward the suggestions to MMF's development accordingly.