The Research Of The Formation Mechanism Of China’s Market Interest Rate And The Influencing Factors

The interest rate is the prices money,it will affect many aspects of financial market,such as resources configuration, market structure, industry operating efficiency.It is a profound impact on a country’s real economy, financial markets and foreign economic market,the ability of the interest rate reflecting the supply and demand of funds accurately will affect a country’s efficiency of allocating financial resources.Since the financial development theory been proposed, the interest rate liberalization as an important content, is thought to enhance the efficiency of the allocation of financial resources and better the cost structure. Looking at the international economic trends, interest rate liberalization reform can improve a country’s economic structure,improve the country’s position in the international market. Therefore, the interest rate liberaization reform relate to the global,and it is necessary to have a deep understanding of the reality of formation mechanism of market rate.This paper reviews the various stages of the theory of the interest rate decision and the formation mechanism. Interest rate decision mechanism includes classical interest rate decision theory, Keynesian theory, loanable funds theory, IS-LM model and CIR model, the interest rate formation mechanism is divided into non-equilibrium interest rate formation mechanism and market interest rate formation mechanism in two parts. Based on the theoretical analysis, this paper Chinese market interest rate formation mechanism and influencing factors investigated reality, first sort out the process of marketization of interest rates as well as the achievements of each stage;Secondly, China’s interest rate formation mechanism market qualitative analysis, that the decision of the Chinese market interest rates factors include both market and non-market; Finally the Chinese market interest rate formation mechanism of some of the existing problems, including SBC, non-market benchmark interest rate commercial banks pricing power is not high, the banking sector the existence of market monopoly. Based on the above analysis, we use the fourth quarter of 2007 to the third quarter of 2015, data 13 indicators, empirical analysis principal component analysis and multiple linear regression on the market interest rate formation mechanism. According to empirical results, this paper argues benchmark interest rate non-market is the impact of market interest rateformation mechanism of the biggest problems, while state-owned SBC, banking monopoly also restricts the formation of market interest rates. Finally, this paper draws conclusions are described, and the problem situation and regression models found in the formation mechanism of the departure from the market interest rate, put forward reasonable suggestions.China’s interest rate libealization has steped into a new stage, but the domestic research on the formation mechanism of market interest rates remained mostly on the relationship between research and macroeconomic variables. In this paper, some of the institutional factors and qualitative factors have taken into account, and it may provide a new perspective for the further study of the market interest rate formation mechanism.