Research Into The Selection Of China’s Money Market Benchmark Interest Rate

The paper, in the viewpoint of monetary policy’s interest rate conducting channel, is aimed at making research into benchmark interest rate of money market in China and building the overall framework for its choice. After relevant literature review and theoretical explanations, the paper summarizes general principles, makes preliminary comparative analysis as for intrinsic attributes, pros and cons within prospective or quasi-benchmark interest rates of money market, subsequently makes the claim that SHIBOR has the most potential to become the genuine benchmark interest rate, and then makes empirical analysis, based on which the paper puts forward some suggestions on improving SHIBOR and monetary policy’s interest rate conducting channel.This paper mainly consists of nine chapters:The first chapter introduces its topic background, research meaning, makes literature interview centered around two facets——one is the choice of benchmark interest rate; the other is the conducting effectiveness of money market interest rate, and eventually introduces its overall research framework.The second chapter sheds lights upon relevant theories including interest rate, benchmark interest rate, and monetary policy’s conducting channel so as to incorporate the research of benchmark interest rate into the theoretical framework. What’s more, this chapter puts in a new statistical indicator--social financing amount into the framework of monetary policy’s conducting channel.The third chapter, after describing the necessities of benchmark interest rate in money market, summarizes general principles which pave ways for the following empirical analysis.The forth chapter, based on the present situation about market-oriented reform of interest rate, makes contrast about central bank note rate, the inter-bank bond repurchase rate, short-term bond yield as for their intrinsic attributes, formation mechanism, pros and cons, and makes the preliminary conclusion that SHIBOR is most likely to have the final say in China’s financial market.The fifth chapter makes empirical analysis to above-mentioned money market interest rate including correlation and Granger causality of SHIBOR’s every maturity period, SHIBOR&other money market interest rates.The sixth chapter makes further analysis of SHIBOR’s run effect in monetary policy’s interest rate conducting channel. It tests the conducting effectiveness of SHIBOR to deposit-loan rate in commercial banks from the viewpoint of the controlled-interest rate channel, and also tests the interrelation of SHIBOR and macroeconomic variables.The seventh chapter summarizes empirical conclusions derived from above analysis, and elicits the present accomplishment and inadequacy within SHIBOR.The eighth chapter comes up with corresponding suggestions about how to improve formation mechanism of SHIBOR and monetary policy’s interest rate conducting channel.The ninth chapter interviews its originalities, shortcomings and further fields remaining to be improved.