Analysis of external macro-environment of interest rate marketization in China
1. Analysis of international environmental factors. Since 1980s, interest rate marketization has become a trend in the international financial market. The United States successfully marketized interest rates on March 1986, and Japan finally marketized interest rates on June 1994+00.
2. Analysis of the impact of China's entry into WTO. After China's entry into WTO, five years later, the geographical and customer service restrictions for foreign banks to carry out RMB business will be lifted, and they can operate retail banking business, and all banking business will be completely liberalized.
3. Analysis of the impact of foreign exchange management policies. Promoting the interest rate marketization reform can not only narrow the spread between local currency and foreign currency, but also reduce the policy pressure of implementing foreign exchange control, making it possible to actively and steadily open more communication channels between local currency and foreign currency.
4. Analysis of the development trend of international financial market. The interest rate marketization reform not only creates conditions for financial institutions to expand their scale, but also creates conditions for future convertibility under RMB capital projects. At the same time, it also creates conditions for large-scale market-oriented mergers and acquisitions between financial institutions through capital market tools in the future.
Analysis on the Internal Environment of Interest Rate Marketization in China
1. The fiscal deficit has been year after year, and there are hidden dangers in macroeconomic stability.
2. The benign competition between the commercial banking system and financial institutions has not yet formed, and the financial supervision system is not perfect.
3. The operating conditions of state-owned enterprises are not good, and the soft budget constraints have not been eliminated.
Affected by the Asian financial crisis and its long-term accumulated institutional and structural defects, the domestic market demand is generally insufficient at present, and the government has adjusted the interest rate to a very low level.
All these indicate that interest rate liberalization in China is a complicated and sensitive policy, which should be implemented cautiously.
China liberalized the interbank lending rate on 1996, which took a solid first step towards interest rate marketization. Then the market interest rate of national debt was liberalized, and a good interest rate formation mechanism between the money market and the national debt market was gradually established, which also set a benchmark interest rate for the government to adjust interest rates. This laid the foundation for the marketization of interest rates. Next, China should first adjust the interest rate structure, reduce the legal interest rate from more than 200 to about 30, and adjust the interest rate more frequently according to the economic operation, at the same time, improve the money and capital markets, enrich the trading varieties in the market, and gradually expand the proportion of market interest rates in corporate financing. When the commercialization of state-owned banks is progressing smoothly, the competition level of the banking system is improved and the supervision mechanism is perfect, we can consider gradually expanding the freedom of commercial banks to determine the loan interest rate and liberalizing the loan interest rate. If banks operate well and the reform of state-owned enterprises makes progress, deposit interest rates can be gradually liberalized. Through this step-by-step and step-by-step reform, the interest rate will finally be fully marketized.
Process reference
Judging from the relatively successful experience of interest rate marketization reform in the United States and Japan and the lessons of failure of interest rate marketization reform in Argentina, the following aspects are worth learning from in the process of promoting interest rate marketization in China:
(1) The macroeconomic situation determines the timing of reform.
(2) The degree of financial micro-infrastructure construction restricts the practice speed of reform. Most people successfully cultivated the financial market and perfected the financial institutions before liberalizing the interest rate, but those who completely relaxed the interest rate control without a solid market foundation ended in failure.
(3) Establish an effective supervision system and appropriate laws and regulations to replace direct intervention in interest rates and finance.
In the process of interest rate marketization and financial liberalization, it is necessary to establish an appropriate and prudent management system, formulate high-quality supervision standards, conduct strict and effective bank supervision and evaluate bank risks. This is very important for the financial system to play a successful role after interest rate liberalization.
(4) The reform of interest rate marketization must be considered comprehensively. According to experts from the International Monetary Fund and the World Bank, only when a country's macroeconomic stability and banking supervision are completely effective can interest rate marketization be realized quickly, otherwise, there needs to be a process of creating conditions.
(5) The marketization of post-interest rate should be stopped as soon as possible.
After the marketization of interest rates, due to the relaxation of other controls on banks, it will cause a common problem: a large amount of funds from financial institutions will flow to underdeveloped industries that can appreciate rapidly under the background of regulation.