With the completion of interest rate marketization in debt market, money market and foreign currency market, promoting the marketization of deposit and loan interest rates and realizing market-oriented floating has become the main task of interest rate marketization in China in the next step, and it is also one of the goals of financial reform with wide influence.

On the one hand, in the current domestic and international economic and financial environment, the disadvantages of interest rate control are increasingly exposed, and the acceleration of interest rate marketization has its internal driving force. The internationalization of RMB and the acceleration of capital account liberalization also put forward objective requirements for the process of interest rate marketization. On the other hand, at this stage, China basically has the basic conditions to continue to accelerate the marketization of interest rates. In recent years, the expansion of the capital market and the gradual improvement of the bond market category system indicate that the field of financial assets with market-oriented pricing is expanding. The central bank's interest rate adjustment system has been gradually improved, and its ability to use monetary policy tools to guide market interest rates has been further improved. Therefore, from the internal driving factors and necessary conditions, the internal and external environment has gradually matured, and China has basically met the conditions for interest rate marketization at the macro and micro mechanism levels.

At present, the foreseeable risks are: first, commercial banks raise deposit interest rates in a short period of time or recklessly, resulting in a sharp decline in bank profits; Second, because the interest rate cost has increased, banks have shifted some of the costs to loans. However, as long as commercial banks are well supervised and macro-policies are relatively stable, there will be no major problems.

In the short run, interest rate liberalization will indeed have an impact on the financing of small and medium-sized banks and small and micro enterprises, but in the long run, it will help promote the development of loans for small and micro enterprises.

What do you think of interest rate marketization? What are its advantages and disadvantages?

The principle of interest rate marketization comes from financial repression caused by regulation.

It is too much management that leads to the distortion of financial markets.

Generally speaking, interest rate marketization is a manifestation of long-term advantages and short-term disadvantages.

The benefits are as follows:

The market-oriented operation of financial institutions and the open market competition environment make financial institutions pay attention to the market and customers.

In the market-oriented environment, financial institutions can flexibly use interest rate pricing in order to obtain the market, which helps enterprises to reduce financing costs, which can be proved by reducing costs and draining entities.

Financial subjects and financial products will be enriched with the marketization of interest rates. That is, there will be more financial participants and financial products to choose from in the market.

Therefore, marketization will eventually lead to scientific and reasonable financial and monetary policies, thus promoting economic development.

Disadvantages:

In the short term, due to competition, financial institutions use high-interest loans to expand market share, resources and markets tilt towards big banks, and the market of small financial institutions shrinks, which may lead to difficulties in survival.

Financial institutions operate in debt, and the quality of assets further declines.

Wait a minute.

The marketization of interest rate is a means to enhance the vitality of financial institutions, so marketization will enable financial institutions to improve their operating efficiency and quality under the conditions of technological change. Although there are short-term disadvantages, it is beneficial in the long run.

What are the benefits of interest rate liberalization?

The mainstream view of understanding the concept of interest rate marketization stays on the understanding of the relationship between supply and demand, or that interest rate marketization means that the monetary management authorities hand over the decision-making power of interest rates to the market, and the market subjects decide the interest rates independently. There is no essential difference between the two statements. But these theories are all carried out within the framework of supply and demand analysis, and their defects are obvious. First, the premise of supply and demand analysis is the dichotomy between consumers and producers, which is not appropriate when analyzing the interest rate decision in the capital market. The most important reason is that the identity of investors in the capital market is uncertain and there are too many speculative intentions. Second, products in the capital market (such as capital, financial assets, financial innovation products, etc.). ) is a trinity and reversible, which is very different from ordinary products. Therefore, there are many disadvantages in analyzing the interest rate decision by analyzing the supply and demand analysis framework of ordinary products. Based on the above considerations, the author puts forward a new interest rate determination theory-dynamic bargaining process model of interest rate (Luo Qiaogen, Ma Wenbin, 2003) to describe the process of interest rate marketization. We use four models to describe our interest rate marketization process: 1. The first model is a static Nash negotiation model with complete information. Under the condition of complete symmetry of information, the two sides of the negotiation set their own prices at one time and achieve unity according to the principle of maximizing interests. This model basically covers the main ideas of the mainstream interest rate determination theory. The difference is that the mainstream theoretical analysis of interest rate determination can not be carried out here, and we can make further amendments to the model. 2. The second improved model increases the asymmetry and incompleteness of information. For example, we assume that the fund provider only knows that the potential income obtained by lending to the fund user obeys a probability distribution, and the fund user knows its exact value. But there is also a question, that is, is it appropriate to describe incomplete information with probability distribution? For example, we assume that the users of funds are enterprises, and the enterprises put into production after obtaining loans. We assume that the users of funds know the exact investment profits, which is also unimaginable. The basic knowledge of enterprise theory tells us that the biggest role of entrepreneurs is to overcome the uncertainty of investment profits. If the profit is certain, it is not entrepreneurial behavior, but * * * behavior or rent-seeking behavior. The model is more in line with the actual economic situation, and also provides a theoretical basis for * * to carry out necessary supervision and intervention in the process of interest rate marketization, which will be analyzed in detail below. 3. The third model introduces time factor and dynamic analysis to overcome the shortcomings of the previous model, which is a bargaining model with incomplete information. The core meaning is that the negotiating parties are completely rational, aware that an agreement will be reached in the next round, and only the discounted value of the next round of judgment is required in this round of negotiations. This model describes the influence of supply and demand on interest rate through the patience of negotiation, but one disadvantage of this model is that the negotiation result is related to the negotiation period, which is overcome by the bargaining model of indefinite negotiation. But we can't overcome another point: who will bid first. So we introduce the next model to discuss this problem. 4. The fourth model is the soft and hard strategy model. It assumes that both parties choose to take a weak or tough attitude towards who bids first with a certain probability. This model tells us that only one side adopts soft strategy and the other side adopts hard strategy is Nash equilibrium. Of course, other results may occur, but they are not Nash equilibria. Through the theoretical model composed of these four game models, we can discuss the marketization of interest rates. After mathematical processing, we can see that there is a subtle contradiction here, and draw the following enlightenment: when the probability of market participants is q = 1, then p = (1-q) n = 0. So everyone adopts cooperative strategy, so at time t, everyone will make a deal, so no one can find a partner when asking for help. If there is no partner in the next period, everyone's decision will become another period, and its optimal q will not be 1. This contradiction means that although the optimal q can be very close to 1 in a crowded market, it will never be completely equal to 1. This tiny probability of choosing a non-cooperative strategy is a condition that it is possible to find the next partner in the market, so it is a condition that the market can use the potential cooperation opportunities to make people choose a cooperative strategy that tends to 1. This is also the root of the paradox of capital asset pricing model. In this paper, supply and demand pricing is called impersonal pricing, while game theory pricing is called personalized pricing. ......

What are the disadvantages of interest rate control? Please explain the necessity of interest rate marketization reform in combination with China's national conditions.

Under this system, the fluctuation of interest rate often can't keep up with the changes of the market, for example, enterprises and individuals who need funds can't get timely funds, or go bankrupt because of the sudden change of interest rate policy. For example, there is too much money in the market, the interest rate policy is not timely, and there is short-term inflation. There are countless such disadvantages. China is dominated by industrial enterprises, with overcapacity everywhere, excessive consumption of natural resources and weak technical competition. When the interest rate is marketized, enterprises and individuals with high technology get sufficient funds and their production capacity increases. Backward enterprises will wash the sand in big waves and die one by one. It will also double the productivity of the whole society.

The Influence of Interest Rate Marketization in China

The essence of interest rate marketization reform is not to adjust the interest rate level, but to reform the formation mechanism of interest rate (capital price) and make it an accurate price signal reflecting macroeconomic operation. The original intention of interest rate control is to control the distribution of financial assets, strengthen the security of the banking system and promote economic growth through this control. Marketization of interest rate is the only way for the sustained economic development of all countries. Although the degree of interest rate marketization in some financial markets in China has been greatly improved, the process of interest rate marketization reform is far from over. Its impact is as follows:

(1) Interest rate rise risk. Generally speaking, the result of interest rate marketization is the improvement of interest rate level, especially for China, a country short of funds. The increase of interest rate may bring about two negative effects: first, the increase of financing cost of enterprises and * * * will reduce the investment enthusiasm of enterprises, and will also lead to the reduction of investment scale of * * *, thus slowing down economic growth; Second, high interest rates caused a large amount of overseas hot money inflows, which led to financial market and macroeconomic instability.

(2) Moral hazard and adverse selection. The marketization of interest rate means that banks should set a reasonable price for loan interest rate according to the principle of risk plus. At present, a considerable part of the loan demand can not be met, mainly because banks feel that the risk is too great and the interests are asymmetric. Higher interest rates may also aggravate the problem of adverse selection. Because high interest rates will inevitably inhibit investment in stable and low-return projects, it is investors who actively seek high-return and high-risk loans, which is certainly not what banks want to see. The reason of moral hazard and adverse selection is information asymmetry. The solution is that banks should know more about the borrower's credit before issuing loans.

(3) Bank and enterprise risks. The marketization of interest rates makes the competition in the banking industry more intense. Under the incentive of interest rate, banks may reduce the loan interest rate and increase the deposit interest rate, thus narrowing the spread and reducing the bank's profits accordingly; On the other hand, the interest rate risk has increased, and banks with poor management will lose money or even close down. For example, within a few years after the United States fully realized the marketization of interest rates from 65438 to 0986, an average of about 200 banks closed down every year. Bank failure may have a chain reaction and even trigger a banking crisis.

For some inefficient state-owned enterprises, the rise in interest rates caused by interest rate liberalization will be a severe test for them, and it also poses a problem for banks: if they continue to lend, they may not even be able to pay interest; If we don't continue to give them financial support, they may go bankrupt, the bank's original loans will not be recovered, and bad debts will increase. Moreover, some enterprises are related to the national economy and people's livelihood, and the closure will have a serious impact on the economy and society.

To what extent is China's interest rate marketized?

A few days ago, it was reported that the Third Plenary Session of the 18th CPC Central Committee to be held in June this year 165438+ 10 will make strategic decisions on financial reform, including promoting interest rate marketization reform. So, to what extent has China's interest rate marketization reform been carried out at present? What is the key to the reform of interest rate marketization? What kind of monetary policy orientation should we have after interest rate liberalization?

Interest rate marketization has just started.

China has adopted the strategy of "small steps and quick steps" in interest rate marketization. First, the central bank cut interest rates asymmetrically twice in a row last year. As for the deposit interest rate, the one-year deposit interest rate can be increased by 65,438+00% on the basis of the benchmark interest rate announced by the central bank, and the deposit interest rates for other maturities are implemented according to the benchmark interest rate. At present, the deposit interest rates of some banks for two years and above can also rise by 10% on the basis of the benchmark interest rate announced by the central bank.

In terms of loan interest rate, when the interest rate was cut asymmetrically last year, the central bank stipulated that its lower limit should not be lower than 70% of the benchmark interest rate. On July 20th this year, the central bank cancelled the lower limit of the loan interest rate. This means that the loan interest rate has been partially marketized. "But it is not completely market-oriented, because the upper limit of the loan interest rate is also controlled by the regulatory authorities. The relaxation of deposit and loan interest rates has brought many influences.

In addition, there are two major impacts: first, some high-quality customers with strong bargaining power get the opportunity to reduce financial costs, thus directly increasing profit margins; Second, the increase of deposit interest rate has improved the return level of residents' savings. At present, many banks have raised the medium and long-term deposit interest rate, which is generally around 10%.

The formation mechanism should be marketized first.

Because interest rate control is mainly manifested in lowering interest rates, the central bank can directly set various interest rate levels to ensure the supply of funds and maintain strong investment demand, which plays a significant role in the rapid recovery and development of the economy, especially in the period of low economic prosperity. However, with the further development of economy, its disadvantages are constantly emerging.

From the point of view of consumption, because of the low interest rate, residents are reluctant to deposit their money in the bank, and they prefer to spend it immediately. On the surface, it is conducive to consumption and expanding domestic demand. In fact, such consumption is not positive consumption, but negative consumption, which is not necessarily good for the growth of social wealth.

From the investment point of view, potential lenders tend to engage in low-yield direct investment, while borrowers who can obtain bank funds at low interest rates will choose capital-intensive projects instead of putting their money in the bank and lending it out, which is not conducive to the development of bank credit business, thus affecting the role of finance in supporting the real economy.

At present, the inter-bank market interest rate seems to have been marketized, but it has not been marketized. First, because this interest rate was not formed in a development environment, it was actually formed by the game between commercial banks and a few institutions, and such interest rate did not necessarily truly reflect the relationship between supply and demand in the capital market at that time. Second, because transparency is not high.

The real interest rate marketization must have two characteristics: one is the marketization of interest rate formation mechanism. That is, what kind of interest rate mechanism is used to determine the interest rate level; Second, it should be matched with the deposit insurance system.

The policy orientation should also be changed.

When talking about the monetary policy orientation after the marketization of the interest rate formation mechanism, Zuo said that at present, China's money supply operates in accordance with the planned economy model, that is, the money supply in that year increased to a certain extent on the basis of the total loan amount in the previous year.

After the marketization of interest rate formation mechanism, it is no longer suitable to appear in monetary policy in a quantitative way, but to influence the market demand for funds through interest rates. Of course, the market interest rate formation mechanism in China should not only refer to the practices of the international market, but also be determined according to the national conditions of China. It is suggested that the central bank issue a guiding and dynamic interest rate level for commercial banks' reference. Can't be marketized for the sake of marketization. Marketization is only a means to optimize the allocation of resources and capital, so that funds can play a greater role in the real economy.

What is interest rate marketization and what is the current situation of interest rate marketization in China?

What is interest rate marketization?

Interest rate marketization refers to the interest rate level of financial institutions operating and financing in the money market. It is determined by market supply and demand, including interest rate determination, interest rate transmission, interest rate structure and interest rate management marketization. In fact, it is to hand over the decision-making power of interest rate to financial institutions, which will adjust the interest rate level independently according to the capital situation and the judgment of financial market trends, and finally form a market interest rate system and interest rate formation mechanism based on the central bank's benchmark interest rate, with the money market interest rate as the intermediary, and the deposit and loan interest rate of financial structure determined by market supply and demand.

What's the status quo?

Through more than ten years of efforts, China's interest rate marketization reform has been steadily promoted, especially the liberalization of money market interest rates, and the interest rate marketization reform has achieved phased results. First, gradually realize the marketization of interest rate varieties in the money market, including interbank lending rate, bond repurchase rate, bill market discount rate, national debt and policy financial bond issuance rate, secondary market interest rate, etc. The second is to simplify the management of deposit and loan interest rates. In the past, there were many kinds of managed interest rates. In recent years, the autonomy of commercial banks in managing interest rates has been improved through deregulation or deregulation. Third, the floating range of SME loan interest rate has tripled, which has enhanced the risk management ability of bank loans and eased the loan difficulties of SMEs. The fourth is to liberalize the management of foreign currency interest rates. At present, the People's Bank of China manages few foreign currency interest rates. Fifth, Chinese-funded banks as legal persons try out large time deposits of Chinese-funded insurance companies as legal persons, and the interest rate is determined by both parties through consultation. In short, from the institutional point of view, the short-term and medium-term goals of China's interest rate marketization reform have basically been achieved.

What impact does interest rate marketization have on enterprises?

The primary influence of interest rate marketization is that the net interest margin of banks narrows, thus reducing the net interest income of banks. In addition, the impact on enterprises is that costs will increase and prices will rise, and curbing investment may reduce personal consumption.

Understanding of interest rate marketization in China

The marketization of interest rate means that the state only controls the benchmark interest rate and leaves the decision-making power of other interest rates to the market, that is, the interest rate level is determined by the relationship between supply and demand of funds in the market. Whether in developed or developing countries, since World War II, everyone has been managing a strange process from interest rate control to marketization. However, interest rate liberalization has both advantages and disadvantages:

First, the necessity of interest rate marketization

1. Marketization of interest rates can optimize resource allocation. A reasonable interest rate level can guide people's investment and consumption, guide the flow of funds to the places where they are most needed, and thus achieve the result of optimal allocation of resources. The marketization of interest rate can make interest rate really become the price of credit funds, make funds flow from inefficient departments to efficient departments, realize the allocation of capital resources, and finally promote economic development.

2. Marketization of interest rate is an inherent requirement for the smooth realization of monetary policy objectives. There is a need for an intermediate goal between the central bank's monetary policy tools and the ultimate goal, and interest rate marketization is an ideal choice for the intermediate goal of the central bank's monetary policy.

3. The key to improve the competition mechanism of financial institutions. With the deepening of China's economic system reform, the rise of non-state-owned enterprises and joint-stock banks, the transformation of the operating mechanism of state-owned commercial banks and some state-owned enterprises, the disadvantages of interest rate control are becoming more and more prominent.

Second, the restrictive factors of interest rate marketization

1. Micro-economic entities lack interest restraint mechanism.

2. Financial institutions are very sensitive to the regulation and response of interest rates.

3. The macro-control measures of the central bank are not perfect.

4. The financial market, especially the money market, is underdeveloped.

Marketization of interest rate is imperative. Although there are still some restrictive factors in China's interest rate marketization, on the whole, the time for China's interest rate normalization reform is basically mature and has achieved certain results. Therefore, the prospect of interest rate marketization in China is still bright ~

Disadvantages of interest rate marketization

This problem is actually the disadvantage of interest rate marketization in China.

As follows, for your reference:

1. Under the marketization of interest rate, the profit model of the traditional credit spread model of banks will be impacted.

Under the marketization of interest rates, from most international experience, there are many cases of bank failures in some countries after the marketization of interest rates, and the situation in the United States is the most typical. It took about five years for the United States to complete interest rate liberalization from 1982 to 1986. In the early days of interest rate liberalization, the number of banks closed down in the United States reached double digits every year, and 1985 reached three digits, and then it increased sharply. 1987- 199 1 year, on average, 200 banks fail every year, with 250 banks failing in the most year, which is one of the challenges to the traditional credit profit model. On the other hand, the second challenge brought by interest rate marketization to the traditional model is that it may worsen the financing environment of small and medium-sized enterprises. After all, it may be expensive for national banks to provide retail financial services to small and medium-sized customers, while China's banking industry lacks a multi-level system, so the interest rate marketization needs the development of "grassroots finance".

2. The marketization of interest rate makes the interest rate risk of commercial banks suddenly increase.

After the marketization of deposit and loan interest rates, the interest rate risk faced by commercial banks is increasing, not only the traditional credit risk, but also the interest rate risk, making liquidity management more difficult. Before the implementation of interest rate marketization, under the interest rate control system, all commercial banks absorbed deposits and issued loans according to the interest rate level stipulated by the central bank. In this case, the interest rate risk is not obvious, and commercial banks basically do not need to consider interest rate risk. However, after interest rate marketization, interest rate risk will gradually increase, and the difficulty of managing interest rate risk will gradually increase. In this case, commercial banks should not only consider the impact of interest rate fluctuations on their own positions, but also consider the impact of interest rate risks on their business strategies.

3. Marketization of interest rate will gradually increase the potential credit risk.

There is information asymmetry in the financial market, and the resulting adverse selection and moral hazard will become increasingly obvious with the process of interest rate marketization. Generally speaking, interest rates have a selective function. For enterprises, the higher the risk, the higher the income. Therefore, for each loan interest rate, there is a corresponding level of income and risk. If commercial banks raise interest rates, borrowers of low-risk projects will be screened out, which will increase the average risk in the credit market. The result of high interest rate is that high-risk projects expel low-risk projects and produce adverse selection. In the process of interest rate marketization, if there are no corresponding risk control measures, if commercial banks unilaterally pursue short-term gains and overemphasize raising interest rates to make up for risk losses, the result will be the loan demand of adventurers, and at the same time, the qualified loan demanders with normal interest rates will be squeezed out, which will inevitably lead to adverse selection in the credit market, and at the same time, the moral hazard of lenders will increase, thus reducing the overall level of loan quality in the credit market and increasing the credit risk of future default. Commercial banks are facing increasing pressure to further identify credit risks.

4. Marketization of interest rate will change the behavior of depositors.

As we all know, in the past 10 years, China's resident deposits have maintained a high-speed growth trend, which seems to be somewhat abnormal. Resident deposits seem to be insensitive to changes in interest rates. When analyzing this phenomenon, some scholars pointed out that the traditional theory asserts that the decline in real interest rate will lead to a relative decline in deposit growth rate, which is based on negative income effect and negative substitution effect. As far as the former is concerned, because China is still in the period of rapid economic growth, the negative effect of income will not appear; As far as the latter is concerned, the varieties of fixed-income securities replacing bank deposits are extremely scarce, and the pension system is still not perfect. Therefore, the growth rate of residents' deposits is not sensitive to interest rates. Therefore, this phenomenon is caused by the imperfect market economy system and system in China, such as social security system and financial system. With the deepening of market economic system reform and the continuous advancement of financial system reform, a series of variables that restrict residents' savings behavior will change accordingly, and residents' savings behavior will also show new characteristics and become more and more sensitive to interest rate changes. In recent years, the term structure of residents' savings deposits has undergone important changes, which tends to be short-term, which to some extent increases the difficulty of commercial banks in managing their positions. This challenge is very severe for commercial banks. The current interest rate marketization and capital disintermediation have great influence on commercial banks, especially ......