Research On Interest Rate Marketization Of China

Since the90s of last century, the interest rate marketization of China has gone deeply. In2013, the People’s Bank of China fully liberalizes financial institutions’ lending rate. In the same year, Loan Prime Rate was born. In order to adapt to interest rate marketization, commercial banks select SHIBOR (Shanghai interbank offered rate), LPR (Loan Prime Rate) and other interest rates as benchmark lending rate. How to choose benchmark lending rate scientifically and efficiently in fierce competition has become the most important problem for commercial banks.From the perspective of benchmark lending rate, this thesis investigates the effectiveness of monetary policy transmission mechanism in the process of Chinese interest rate marketization. By using a large number of latest data and econometric model, this thesis studies three kinds of benchmark lending rate (PBOC benchmark rate, SHIBOR and LPR) and examines if monetary policy intention is fully transmitted. This research is significant not only in theory but also in practice.This thesis mainly utilizes qualitative and quantitative methods to analyze China’s interest rate marketization. It includes five chapters:Chapter one introduces research background, significance, main research content, innovation points. Chapter two elaborates theories of interest rate marketization, recent domestic and foreign literatures. Chapter three analyzes history of China’s interest rate marketization and enlightenments of foreign countries’ interest rate liberalization. Chapter four is the empirical study of effectiveness of monetary policy transmission mechanism in terms of benchmark lending rate (PBOC benchmark rate, SHIBOR and LPR) and Chapter five provides conclusions and policy suggestions.