Research On The Improvement Of Chinese Regulation System About Private LendingInterest Rate

As the price of private lending, interest rate is not only an important indicator of the supply-demand relationship of private lending, but also a regulative method of the government. Due to its significance and based on different reasons, both domestic and overseas legislators propose that it should be regulated. However, with the rapid economic development, the disadvantages of the present legal regulation system are exposed, which has sparked widespread controversy. This paper provides some methods to improve the legal system of China’s private lending rates through analyzing the defects of current provisions, comparing domestic experiences with foreign countries’and combining with the latest measures which applied in the financial reform in Wenzhou.The thesis is divided into five parts. The first part defines the concept of private lending, finding out its market-oriented development trend, analyzing the private lending rate and eliciting the idea that rates regulation is a basis for regulating private lending.The second part enumerates existing provisions of private lending rate systematically and introduces the controversy over whether to abolish the interest rate ceiling, which is four times the benchmark interest rate set by the central bank. What’s more, it also sums up the shortcomings of those rules above in judicial practice.The third part introduces different regulative methods and legislative ideas of private lending rate from abroad, and finds out lessons by comparing them with our existing law.The fourth section describes the latest measures of private lending rate regulation, which were taken by ongoing Wenzhou financial reform:to build a filing registration system and a monitoring system of private lending rates. Then it analyses the issue of whether the local government should be entitled to impose administrative punishment on the behaviors of lending money at usury.Finally, this paper provides several suggestions on how to improve the existing private lending rate regulation system:perfecting existing clauses, establishing prior administrative regulation mechanism and a multilevel legal liability system of usury.