A Brief Talk on the Market-Oriented Interest Rate Reform in China 金融英语

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1、UniversityofInternationalBusinessandEconomicsSemesterone,2014—2015SchoolYearPaperTitle:ABriefTalkontheMarket-OrientedInterestRateReforminChinaCourseNameFinancialEnglishStudentNumber20141810214StudentNameSchoolNameSchoolofInternationalTradeandEconomicsM

2、ajorNameMasterofFinance1.Whatismarket-orientedinterestratereform?Interestratemarketizationreferstothefinancinginterestratelevelthatfinancialinstitutionsfinanceinthemoneymarket.Itisdeterminedbythesupplyanddemandinmarket,includingtheinterestratedecision,

3、theinterestratetransmission,thestructureofinterestratesandinterestratemanagement.Ineffect,itisthefinancialinstitutionsthatownthepolicymakingrightofinterestrates,thatis,financialinstitutionsadjusttheinterestrateontheirownaccordingtotheircapitalsituation

4、sandtheirjudgmentofhowfinancialmarketwillgo,whichresultsinthefactthatamarketinterestratesystem,whichisdeterminedbythesupplyanddemandinmarket,isestablishedthroughthemoneymarketinterestratebasedonthebenchmarkinterestratesetbyPBC.2.Whyisthemarket-oriented

5、interestratereformexpectedtocarryoutinChina?a.WidelyadoptedindevelopedeconomiesChinashouldtakemoreactiontopromotesteadyandunwaveringmarketizationofthecurrentrigidinterestrateregime,apracticethatiswidelyadoptedindevelopedeconomiessuchastheUnitedStatesan

6、dJapan.b.LackofnormalreflectionandtransmissionThepracticeofsettingtheceilingandbottominterestratesfordepositsandloans-topreventanypossibleviciouscompetitionamongcommercialbanksformarketshare-hasoftenmeantthecountry'sinterestratelevelhasfailedtoreflectt

7、herealconditionsoffundssupplyanddemand.Italsoservesasthemainreasonwhythecountry'smonetary4toolshavesometimesfailedtoproducetheexpectedpolicyresults.Moreimportantly,theceilinginterestratefordepositshasdirectlyresultedinanegativeinterestrateforbigdeposit

8、orsinthecontextoftheever-risinginflationrate.c.ContributiontoinflationpressureIntheabsenceofotherviableinvestmentchannels,anegativeinterestratewillinevitablycausealargevolumeofidlefundstoswarmintothestockandrealestatemarkets,aggravating