An Empirical Study Of The Relationship Between Internet Money Fund Scale And Shibor In China

With the rapid development of the Internet science technology,we are enjoying the "Internet +” services.All goods can be purchased on the Internet including financial products.In June,2013,“Yu Ebao” occurred and it has been popular for over 3 years.Yu Ebao has many advantages,such as easy to buy,low risk,reliable and so on.However,the essence of Yu Ebao is Internet money fund.Internet money fund is a type of Internet financial products which is d ifferent from the “E-economy”.The Internet money funds are connected to some payment platforms or payment APPs.For example,Tianhong Yu Ebao fund is connected to Alipay while Nanfang Xianjintong is connected to Wechat payment.Fund companies and the Internet platforms cooperate with each other to offer these new products.Thanks to the long-tail effect,Internet money fund has a huge scale expansion in recent years which has effected the financial structure and lives of residents in China.For example,commercial banks reform themselves to maintain the business scale;people put their deposits to Internet money fund instead of banks.Overall,the Internet money fund is a great progress in the process of financial market in China.The purpose of this paper is to study a few problems below: how to keep the prosperity of Internet money fund to rich activity of capital market at the same time to avoid the negative effects of rapid expansion of scale to money market.First of all,this paper study the transmission mechanism between money fund and money market from the perspective of theory by us ing the intermediate variable--the yield of money fund.The result of the analysis is there is a closely relation between scale of fund and Shibor(the base rate of money market).This paper adopts the monthly scale of 92 Internet money funds of China and Shibor rate to build a VAR model by Eviews software.The paper analyzes impulse response functions for further research.Then we discuss the empirical results through the theory.In the end,the author build another VAR model by using U.S.retail money fund scale and the federal fund rate for comparative study and put forward feasible suggestions and outlooks.The empirical result reflects that there is an inner relation between the Internet money fund and money market of our country.Internet money fund scale has a positive impact to Shibor while Shibor and scale have the same change trend.On the contrary,the U.S.retail money fund has no long-term relationship to the federal fund rate because different asset allocation of money fund.It is important for the sustainable development of Internet money fund in our country to have a clear understanding of the relationship between the money market development and money market base interest rate and reference to other developed coutries.