Situation Of China's Interest Rate Market And Countermeasures

The Third Plenary Session of the18th Central Committee of the CCP hasdecided to deep the reform of the resolution. With the deepening of the reform, theeconomy and financial field system,structure and development direction of ourcountry will produce major change in2014. Among them, the marketization ofinterest rate is not only a key financial reform, but also the focus field of society.Lastyear, the central bank had released the floor on lending rates,so whether the ceiling ondeposit rates will be canceled this year has been heated discussed by public.This alsoa big problem in front of the financial authorities.In this paper, the related theories of the marketization of interest rate will bediscussed and deducted firstly. Marketization of interest means that the rate refers tothe money market and capital market are determined by market supply and demand，which including the theory of the interest rate decision, transmission and the financialdevelopment. These theories explain the necessity of the marketization of interest.Then this paper analysis the degree of our county’s marketization of interest rate,andfound that china’s interest rate marketization is in a special period.After understandingthe truth, we use the method of comparison to compare the different ways which hasbeen taken in different country, and further analyzes why different methods will leadto different results. After that,through logical analysis, we put forward new ideas forthe next interest marketization reform. These ideas both give attention toefficiency,and risk aversion.We then put forward special ideas and suggestions on thegoing of the ceiling on deposit interest rates.Through theoretical analysis and research, the paper draws the followingconclusions and perspectives: firstly, china needs the incremental method rather thanthe radical one to complete the reform of rate marketization,for the latter may easilylead to reform contradictions concentrated outbreak. Secondly, China’smarket-oriented interest rate is at a critical node,and because of the regulation of the deposit interest rate, the financing channel of our county exist track problem. Thirdly,according to the interest risk brought by the interest rate marketization, this paperputs forward a appropriate suggestions:the management of interest ratemarketization.This suggestion is to seek benchmark interest rates as the referencerates by the short-term, medium-term and long-term three aspects, then wemanufacture rate floating space, so we can both control the risk and the marketinformation.