Analysis On The Efficiency Of The Inter-bank Market In China

The inter-bank market is the core part of the money market, which locate in a fundamental position in the financial market system. The inter-bank market who Originated from in 1984.has experienced a very tortuous course. In micro aspect, it has become an important place to finance for all the financial institutions. In macro aspect, it cooperate with monetary policy to the price change, which can accurately reflect the monetary supply and demand. Only the inter-bank market are efficient,the interest rates can accurately reflect the monetary supply and demand. so researching the inter-bank lending market efficiency is very important.The efficient market theory is the cornerstone of modern financial theory,which application in the inter-bank lending market is becoming more and more extensive.In this paper,on the basis of the efficient market theory.Firstly,I summarized China inter-bank market evolution history,achievements and function.I analyzed the four factors which influence the effectiveness of inter-bank market. Secondly, I put random wave theory model into practice,it is concluded that China inter-bank market operation efficiency is low, which did not meet the requirements of weak efficiency market.Finally,based on the efficient market theory and the inter-bank lending market existing problems,I put forward four suggestions to improve the efficiency of China inter-bank market.we must reform the market mechanism and running system,we also foster the subject of market competition and improve the system of brokers. The mechanism of inter-bank market supply and demand control the money price. We should attach importance to the role of central bank in the inter-bank market efficiency construction and improve the interest rate transmission mechanism.