Since financial instruments are a commodity, their prices should naturally be determined by market supply and demand, rather than simply adjusted by government administrative intervention. However, China is currently implementing a "dual-track" interest rate system-administrative interest rate system and market-oriented interest rate coexist.

In the case that the interest rate has not been fully marketized, the interest rate level can't reflect the real relationship between market supply and demand, and can't reflect the market value or real price of RMB as monetary funds. This provides a lot of arbitrage opportunities for those institutions that may participate in various financing activities at the same time, which makes the market-oriented interest rate greatly distorted in the formation mechanism and economic effect.

The above drawbacks urgently require China to realize interest rate marketization. The so-called interest rate marketization, its connotation is that the government gradually relaxes the direct control of interest rates, cancels the control means that indirectly affect the interest rate level, makes market supply and demand play a leading role in determining the interest rate level, and forms a diversified interest rate system guided by the indirect control of the state, taking the benchmark interest rate of the central bank as a reference and taking the market interest rate as the main body.

In fact, the process of interest rate marketization in China has been nearly 20 years. The general idea of the reform is: firstly, liberalize the money market interest rate and bond market interest rate, and then gradually promote the marketization of deposit and loan interest rates. The marketization of deposit and loan interest rates is based on "foreign currency first, then local currency; Loan first, then deposit; Long-term first, big, short-term, small "order. However, because the reform of commercial banks is not in place and the central bank's interest rate regulation system is not perfect, the further reform of promoting interest rate marketization still faces many challenges.

After 20 years of reform, what steps have not been completed? How long will the reform last? Judging from the various measures currently taken by the central bank, the interest rate marketization will continue at a gradual pace, and China's interest rate is expected to be fully marketized in the next five years.

According to the central bank's vision of interest rate marketization in the next step this year, the interest rate marketization reform will be carried out in the following steps: unifying the floating policy of loan interest rates of financial institutions; Amend relevant laws and regulations; Improve the deposit and loan pricing mechanism of financial institutions and raise the pricing level; Enrich financial products and promote the deepening development of financial markets; Gradually establish and improve the central bank's interest rate regulation system, and give greater play to the role of the market in resource allocation.

—— For the relevant report, please refer to version B 1/B2/B3 of No.633 of the State Administration of Taxation.

China's interest rate marketization reform is like a plane that has been flying for many years, and it is about to land at the terminal.

After the reform of exchange rate system, the next step of China monetary authorities will be to launch an interest rate revolution.

In fact, China has been pushing forward the interest rate marketization. The latest reform measure is that on September 2 1, the People's Bank of China adjusted the calculation and settlement rules of RMB deposit and loan interest, in which the independent pricing of six kinds of deposits, such as notice deposits and agreement deposits, was delegated to commercial banks.

This has promoted the reform process of marketization of deposit interest rates.

At present, China's interest rate marketization is mainly to liberalize the upper limit of deposit interest rate and the lower limit of loan interest rate, which is the most critical link in the overall reform of interest rate marketization.

Since 1986 China allowed specialized banks to lend to each other and started the interest rate marketization in the money market, the interest rate marketization in China has been going on for nearly 20 years.

However, because the reform of commercial banks is not in place and the central bank's interest rate regulation system is not perfect, it is still facing great challenges to promote the further reform of interest rate marketization, but its market conditions have matured with the deepening of reform.

According to Dr. Peng Xingyun from the Monetary Theory and Policy Research Office of the Institute of Finance of China Academy of Social Sciences, China is expected to realize the full marketization of interest rates in the next five years.

Interest rates in China can be divided into three categories according to the degree of marketization.

First, strictly control interest rates, mainly for residents and enterprises, RMB deposit rates and US dollar small deposit rates; The second is the interest rate that is being marketized, such as the loan interest rate of banks and the issuance interest rate of corporate bonds; In addition, it is basically a market-oriented interest rate, including various financial market interest rates except corporate bond issuance rate, RMB agreement deposit rate, foreign currency large deposit rate dominated by US dollars, and foreign currency loan rate.

During the 20 years of interest rate marketization in China, we generally followed the idea of money market interest rate and bond market interest rate marketization, and then gradually promoted the marketization of deposit and loan interest rates. The marketization of deposit and loan interest rates is based on "foreign currency first, then local currency; Loan first, then deposit; Long-term first, big, short-term, small "order.

The reform of the upper limit control of deposit interest rate and the lower limit control of loan interest rate will also be gradually promoted in accordance with the above principles.

Tang Xu, director of the Research Bureau of the People's Bank of China, told the Financial Times that the next step of interest rate marketization reform will mainly focus on the term of commercial banks.

Comparatively speaking, the macroeconomic environment is not the key factor affecting the further reform of interest rate marketization.

In Peng Xingyun's view, the liberalization of deposit and loan interest rate control will be carried out step by step, and it is impossible to achieve it in one step. Its gradual pace will be-the loan interest rate may gradually expand the fluctuation range of the lower limit until it is completely liberalized; Then gradually liberalize the upper limit of institutional deposit interest rate, and finally gradually liberalize the upper limit of personal deposit interest rate.

According to the reform experience of international interest rate marketization, the deposit interest rate will show a sharp upward trend in the initial stage of liberalizing the deposit interest rate ceiling. Similarly, liberalizing the lower limit of loan interest rate will also make commercial banks compete to lend, further reducing the loan interest rate.

As a result, the deposit-loan spread space of Chinese banks is further narrowed, which is bound to impact the profitability of Chinese commercial banks. Low profit margin and excessive competition will make Chinese banks face excessive interest rate risk.

At the same time, the advancement of interest rate marketization means that with the deepening of reform, interest rate fluctuations will become more frequent, and the impact of interest rate risk on Chinese banks will become more prominent. However, Chinese banks and other financial market players have not learned to use interest rate risk management tools such as interest rate futures, interest rate options and interest rate swaps to avoid their own risks.

It takes a person who tied the bell to untie the bell.

As an obstacle to the interest rate marketization reform, with the strengthening of financial supervision and the intensification of financial competition, as well as the improvement of its own reform and corporate governance, China's banking industry will surely become an active promoter of the interest rate marketization reform.

Forcing commercial banks to transform. At present, the development of financial market has created conditions for the liberalization of deposit and loan interest rate control.

In the aspect of marketization of loan interest rate, with the introduction and perfection of financial products such as short-term financing bonds, high-quality enterprises have chosen such products with much lower cost than bank loans to meet financing needs. With the expansion of the short-term financing bond market, bank loans in China will be gradually squeezed to replace bank deposits, and at the same time, it will provide a downward reference for liberalizing the lower limit of loan interest rates.

In terms of marketization of deposit interest rate, with the development of money market funds, depositors will gradually abandon the traditional single deposit behavior and choose this kind of investment with lower risk and higher income according to their investment income far higher than that of bank deposits.

China Merchants Bank is planning to join hands with China Merchants Fund to open money market fund accounts and deposit accounts, which will have a certain impact on the absorption of deposits by commercial banks.

The deepening of the above-mentioned interest rate marketization reform will force commercial banks to change their operating methods and profit models, change the traditional income structure relying on deposit-loan spreads, and vigorously develop intermediary business.

In Peng Xingyun's view, China's interest rate marketization reform will be a response to China's financial restructuring.

The current situation of China's financial industry is that the reform of commercial banks generally lags behind other market-oriented reforms, and the pace of independent pricing of interest rates of commercial banks is extremely slow. Zhou Xiaochuan, governor of the People's Bank of China, has repeatedly called on commercial banks to learn to set their own prices.

In an interview with the Financial Times, Hu Qing, deputy director of the Interest Rate Division of the Planning and Finance Department of Industrial and Commercial Bank of China, said that in the future, all deposits and loans of banks will be decided by the banks through consultation with customers. For example, whether to adopt fixed interest rate or floating interest rate, what is the term, the term and method of interest settlement, and so on.

However, even though the floating range of the upper limit of the loan interest rate was completely liberalized last year129, although the relevant officials of the People's Bank of China told the Financial Times that they had urged commercial banks to implement this policy as soon as possible, there was no sign that commercial banks had taken practical measures.

In Hu Qing's view, there are four reasons. First, China's credit interest rate has been under control for a long time, and commercial banks have not changed from simple interest rate management to interest rate pricing and risk management in terms of personnel, management and technology.

Second, the profit model of commercial banks relies heavily on spread income, credit competition is too fierce, and it is generally concentrated in large enterprises and high-quality customers, and the credit pricing ability of commercial banks is not strong.

Third, the information system of commercial banks is far from perfect, and it will take five or six years to establish this system.

Fourth, there is a lack of credit risk rating system, pricing system and interest rate risk management tools.

At the same time, commercial banks lack an effective reference system for the pricing of yield curve when pricing their own interest rates and launching products to avoid interest rate risks.

According to Dr. Yin Jianfeng from the Institute of Finance of China Academy of Social Sciences, to form a complete and reasonable yield curve, it is necessary to optimize the structure of national debt with different maturities. At present, China's national debt is dominated by mid-term varieties of 1 to 10, and varieties below 1 and above 10 are scarce. It is imperative to manage the balance of national debt and issue it in a rolling way.

The reform of the bond market will also be an important condition for interest rate marketization.

Moreover, it is necessary to encourage the development of direct financing, especially the development of securities investment funds and corporate bond markets, and guide the financial market to develop in depth. Only in this way can the interest rate marketization reform in China be successfully completed.

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