Discussion On The Liquidity Of China 's Inter - Bank Bond Market

Our inter-bank bond market was founded in1997and has gradually become themainstream market after16years development.At the same time,it has madeoutstanding contributions to our country’s economic and financial development. Froma macro perspect, it is an important place for the central bank to implement fiscalpolicies through the issuance of bonds, but also an important channel for the People’sBank to implement monetary policy through the issuance of central bank bills whichis such as open market operations; From a microscopic point of view, it has providedan important venue for institutional and individual investors. Liquidity is the mostimportant indicator to measure the operational efficiency of the inter-bank bondmarket. China’s inter-bank bond market’s mobility has been constantly improved, butthe overall bond market liquidity is still low compared to the developed countries.The main contents of this paper includes the following sections：1.Elaborated the theory of liquidity. The main focus on transaction costs, capitalcycle, interest rate duration and liquidity preference theory expounded well below thetheoretical groundwork for the launch。2. Analyzing the current development of China’s inter-bank bond market. Byelaborated on China’s inter-bank bond market development process, summarize andcompare the current situation from its development.3.China’s inter-bank bond market liquidity empirical part. Collect relevant datafrom the bond market since the emergence, select the size and turnover of spot depthand average daily trading volume of spot, the percentage of trading turnover rate andother indicators to spot trading liquidity of the empirical analysis of the status quo ofChina’s interbank bond market.4. Analysis of the inter-bank bond market liquidity movements in the cause.Combination index analysis results, specifically addressed the inter-bank bond marketsince its establishment in general can be improved liquidity reasons.5. Made policy recommendations. Inter-bank bond market combined with the statusquo, from different angles to further improve the inter-bank bond market liquiditymade policy recommendations.