A Study On The Feasibility In The Market Operation Of SHIBOR As A Benchmark Interest Rate

With the continuous development of market economy in our country, the interest rate marketization has continued to deepen. Determine a benchmark interest rate in the interest rate system which composes of a large number of interest rate is important for the interest rate marketization. For a long time, missing the true meaning of China's benchmark interest rate is the important reasons which restrict the interest rate marketization in China. The Shanghai financial market interbank offered rate (SHIBOR) began to operation formally in January 4,2007 which has mach attention. Launching SHIBOR is the key and important step in interest rate marketization of our country. Based on the Interest rate marketization background, and analyzing SHIBOR operation as the main line, paper analyses the effect of SHIBOR operation.This paper is divided into five chapters:The first chapter expounds the history background and significance, and it expatiates the related literature of the research for the benchmark interest rate in China at present, and draws for determination of non-unified conclusion of benchmark interest rates.The second chapter presents the definition and the features of the benchmark interest rate and referring to choice of the foreign market benchmark interest rates, excludes that the market benchmark interest rates choice conditions in China.In the third chapter presents the candidated interest rates have the advantages and disadvantages and analysis the content and the function of SHIBOR.The fourth chapter basically analyses the effect of SHIBOR operation, It is concluded that because of economic situation and system in China at present, as the benchmark interest rate SHIBOR still exists some restrictive factors affecting on bringing into play its benchmark functions.The fifth chapter combining with the quantitative and qualitative analysis in the first two chapters, proposes proposal on further perfecting SHIBOR as our country market benchmark interest rate.Research contributions and shortcomingsResearch contributionsIn this paper, referring to foreign interest rate options for example the U.S.federal funds rate, the paper comes to the choice conditions of the benchmark interest rate in China and analyzes the development process of money market interest rate and strengths and weaknesses of different market interest rate. What's more, the paper analyzes the content and functionality of SHIBOR and the role in promoting the interest rate marketization in our country and basically analyses the effect of SHIBOR operation. It is concluded that because of economic situation and system in China at present, as the benchmark interest rate SHIBOR still exists some restrictive factors affecting on bringing into play its benchmark functions. Finally, Paper proposes proposal on further perfecting SHIBOR as our country market benchmark interest rate, combining with the quantitative and qualitative analysis in the first two chapters.Research shortcomingsIn the process of writing in the paper, because the data comes from the simple weighted average which makes empirical analysis have defects, and secondly, because of the lack of relevant information SHIBOR, the paper lacks analysis depth. Explanations are not sufficient which draw from the analysis which of SHIBOR as the market benchmark interest rate has not been mature yet and the macroeconomic impact has not complete.As the limitations of the author's knowledge and incomplete data, omissions and errors of the analysis are inevitable, so the author hopes that teachers and experts can propose critical and correct recommendations for future research to further improve.