| With the market-oriented reform of China's financial market becoming more and more deepening, the securities market has finished stock-liquidity reform, the bank governance structure has been improved much and the formation mechanism of foreign exchange also has achieved initial results. But, as one of the basis problem, interest rates have not achieved marketization, especially the benchmark interest rate has still not been completely fixed. China's money market has been formed perfect co-existence of interest rate system including deposit interest rate, lending rate, interbank offered rate and the inter-bank bond repo market interest rate in which every interest rate undertakes part of the function of benchmark, China has also not yet formed a benchmark interest rate accepted by the market just like London interbank market rate (LIBOR) or the U.S. federal funds rate.Shanghai Interbank Offered Rate (SHIBOR) is launched in January 2007 which based on the experiences from western countries by China's central bank who has been trying to support it to become core benchmark interest rate. Today, SHIBOR has been developing about four years long and it has been gradually recognized by the financial market, at the same time, the benchmark interest rate characteristics of SHIBOR are more and more obvious. However, there were many economic experts at one time questioned the status of SHIBOR for its reference consistency. For example, before the formal launch of SHIBOR, Dai Guoqiang, Liang Futao (2006) summarized the basic properties of financial market's interest rate and comment on the experience of foreign countries'options of benchmark interest rate based on four properties, they thought the inter-bank bond share market interest rate is better than other interest rates to be the benchmark interest rate in China. Jiang Xianfeng, Wang He, Shi Yongdong (2008) research from the perspective of asset pricing in the market interest rate system, they obtained a conclusion that in the mean - variance standard, deposit rate especially the demand deposit interest rate was the most suitable of the basis for pricing between the current financial market interest rates. In addition, Zou Shuning, Ma Juting, Ding Peipei (2008) analyzed SHIBOR based on its running status, trend and its correlation with the other interest rates, they obtained a conclusion that the baseline status of SHIBOR was in effect at the short end, but it was lack of benchmarks in the long end which was due to the great impact from central bank bills.To form a recognized benchmark interest rate by the whole financial market as soon as possible is important not only for the financial market's orderly development and prosperity, but also conducive to the central bank'effective regulation of the financial markets. Firstly, this paper reviewed the procession of choosing benchmark interest rate of money market of several developed countries, we summed up the characteristics of the benchmark interest rate. Then, we analyzed the developing process and status of China's monetary market. Thirdly, based on the definition and characteristics of the benchmark interest rate, we analyzed SHIBOR from five angles which were marketability, fundamentality, stability, controllability and relevance. In the paper, qualitative analysis and quantitative tests were included so that we could test the validity of the benchmark interest rate more strictly. Finally, we proposed pertinent policy recommendations to improve SHIBOR. The research of this paper is to the benefit of speeding up the formation of benchmark interest rate and financial market reform in theoretical significance. |
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