China's Money Market And Capital Market Connectivity Model Study

The shortage of money in the capital market and the over-providing of money in the money market has been a serious problem for china's financial market. How to establish the effective market-linkage pattern will be the vital problem of promoting the harmonious and healthy development of the two markets. The market-linkage pattern mainly comprises the following four parts: the linkage of organizations, the linkage of channels, the linkage of instruments, the linkage of supervision. 1. The linkage of organizational institutions will be realized by the establishment of the following four aspects: the financial holding company, the securities financial company, the fund administrative company which is set up under the sponsorship of the bank, and the national unitary bond market. In the mean time, found the new institution to confer the linking willing and ability on them. 2. Open the markets of inter-bank short-term loans, mortgage loan on stocks, buy-back national debts, and float bonds, etc. to the securities company in order to make the funds of the money market move to the capital market. Allow the bank issues the stocks and long-term float bonds, etc. on the capital market to make the funds move back to the money market. In all, it will become possible to make the funds move between the two markets though forming the bilateral channel of funds. 3. Through binding and consolidation to the financial instruments of the money market and capital market to promote the new financial instruments and provide the new carrier for reasonable float of the funds. The function of linking the markets will be afforded by the creative financial instruments, such as banking securities current, bond trader rallied to conduct financialtransactions and the securitisation of the credit funds. 4. the linkage of supervision is the new consolidation and combination on the supervisory function and organizational institution. Through forming the uniform supervisory information flat and supervisory joint conference model to achieve the aim of improving supervisory ability and controlling the linked risk.