Factors Affecting The Rate Of Credit Market Conditions Under Asymmetric Information

Interest rate market has been an important part of financial reform. Early in the fourth session of the plenary meeting, my Government proposes to let go of the benchmark interest rate of credit market regulation, allowing interest rates to the market decide. Until 2013 People's Bank of China issued the "further promote market-oriented reform of interest rates," which is completely liberalized and the market interest rates of credit restrictions, thus China's interest rate market-oriented reform has made significant progress.The impact of interest rates has been an important part of the interest rate theory. Under the premise of a perfectly competitive market, the credit market interest rates should be performed by the supply and demand sides of funds on the credit market interest rates reach equilibrium level period. But after analyzing the system we found that even under the credit market is fully competitive market conditions, interest rates on the credit market is still not reached the level of implementation of market equilibrium interest rate period, which is due to supply and demand on the credit market funds asymmetric information so that commercial banks reached a certain level of interest rates, credit rationing approach will be taken to eliminate the excess demand for funds.Since the implementation of interest rate than the market equilibrium level of interest rates on the credit market, then the credit markets will be impossible to achieve market clearing condition is specific manifestations occur precipitation funds. According to empirical analysis in this paper, the precipitation rate of capital and credit markets perform has a linear correlation between the presence of precipitates funds affect the market interest rates. Analysis of precipitation funds, should be on the market from both the supply and demand of credit both for analysis, it is concluded: from the demand side of funds, the funds on the demand side of the credit market narrow, resulting in a lack of demand deformity; from the supply side of capital, because the interest rates of credit market early in the direct control of the People's Bank of China, the latter due to information asymmetry, making China the credit market can not achieve market clearing condition, and thus precipitated the emergence of funds It is inevitable.To solve these problems, we can draw the following conclusion: the implementation of interest rate and credit markets precipitation funds are closely correlated in market interest rates will cause a corresponding change in precipitation amount of funds. Precipitation of funds is due to the credit market does not reach the state of the market-clearing generated, and the market can not achieve market clearing state mainly due to three factors. First, China's credit market structure is irrational, the second is for the Chinese People's Bank in the early implementation of the interest rate on the credit market for direct intervention, the third is the presence of information asymmetries.In this regard we have taken appropriate measures to solve the problem: First, to optimize the structure of the credit markets, increasing the demand for loans to SMEs, making the structure more reasonable credit market; secondly, to establish and improve the credit rating on credit markets system to corporate credit ratings to determine the appropriate level of interest rates; and finally to improve the supervision system of the credit markets, the establishment of commercial banks to exit the system and improve the market access system, to achieve a virtuous cycle of credit within the market.