The Economic Study Of Folk Interest Rate And Its Standardization In China

The standardization of folk interest rate can make the folk interest rate become rational and reflect the status of market capital's supply and demand factually. Therefore, it can be good for standardizing the folk financing market. Basing on the Marxist economic ideas and McKinnon-Xiao's "financial repression" and "financial deepening" theory, the paper studies the standardization of folk interest rate deeply. First, starting from the market formation mechanism of the private lending and folk interest rate, the paper dicusses the market deficiency of the folk interest rate, that is high interest rate level and "market interest rate" outside market, which can bring adverse effects to the financial market, so as to explain the necessity of folk interest rate's standardization. Then, the paper compares the folk interest rate's standardization with the market-oriented interest rate, indicating that the folk interest rate's standardization must make "interest rate decision in the market, regulation and control in government" as the goal. Third, make Wenzhou as an example, the paper reviews the trend of the folk interest rate, which indicates that the folk interest rate has fallen. Now, the gap of folk interest rate and official interest rate is lessening, the folk interest rate is becoming rational, which is the market-driven performance of folk interest rate's standardization. However, the market deficiency decides the folk interest rate's standardization also need the impetus of non-market forces. Therefore, the paper puts forward the corresponding policy and suggestion for the folk interest rate's standardization in final.