The Selection And Cultivation Of The Market Benchmark Interest Rate

The benchmark interest rate is the core of the interest rate system, which reflect and influence the interest rates in currency market, and also act as the conduction tools of central bank’s monetary policy, becoming the basis of financial market pricing of financial products.The appropriate determination of the benchmark interest rate plays a vital role in promoting the development of the financial market, because for the financial participators, it’s the decision-making reference, for the monetary authorities, it’s an important tool to imply financial policies. Firstly, it can provide the appropriate benchmark to determine the market assets price, promote the rationalization of the pricing of financial assets, and help to construct an effective interest rate market system; Secondly, as an important regulatory interest rate transmission channel, it will help improve the country’s macro-economic control measures, and will conducive to national transition from price control regulation to quantity regulation; thirdly, it could be used by the commercial banks to alter the balance of business pricing strategy, enhance pricing power commercial bank funds to improve the valuation of fixed-income derivative products, and strengthen the bond and interest rate risk management bond portfolio management.The construction of china’s interest rate market started late, and still not mature. Now a variety of interest rates parallel system has formed where a variety of interest rates have their own characteristics, but no one can perfectly take over the role as the market benchmark interest rates. China’s interest rate can be divided into policy interest rates and market interest rates, the former mainly refers to the national interest rate policy which can directly control the adjustment of interest rates, such as the central counting rate. The market interest rate refers to the interest rates which are determined by the market funds supply and demand, such as the interbank rate. These rates have benchmark interest rate characteristics. With the deepening of market-oriented interest rate revolution, China will gradually construct the core of the benchmark interest rate to the market interest rate system. Facing so many kinds of interests, how to determine its baseline properties, further development and training to become the focus of current research.The main innovation of this paper lies in:Firstly, the research framework is built on the transmission mechanism of monetary policy, combined with monetary policy, trying to select the benchmark interest rate under the character of conduction. Secondly, make segmentation analysis to the interest rate data, clearly showing changes between the financial crisis and interest rate market reform. Thirdly, make differences to the monetary policy between short-term and medium-term, from a dynamic perspective, research the responsiveness (speed and strength) and short-term balance ability of recovering from policy shocks. Fourthly, the study of market rates and the relationship between the main macroeconomic indicators, the introduction of social financing scale elements that allow the study is no longer confined to the money market, which can be regarded as the benchmark interest rate of research and capital market relations. In the demonstration process, this paper draws similar conclusions with different models, mutually support and complements each other, in order to improve the credibility. Hope this paper can be helpful to solve the problem of the benchmark interest rate selection and cultivation.