A Studty On The Influencing Factors Of Interest Rate Of Wenzhou's Folk Finance

Wenzhou was one of the first pilot projects to implement interest rate floating reform in China,and it was the only one to set up folk interest rate monitoring sites.As the core part of the financial market,the level,trend and structure of the folk financial interest rate can be referred to the bank interest rate marketization.The interest rate of Wenzhou's folk finance is becoming an important sample of China's interest rate market.This paper takes the folk financial interest rate in Wenzhou as the object of study,and the change of the folk financial interest rate in Wenzhou in recent years shows a downward trend.The influence factors for the interest rate of informal finance are researched mainly from the market,monetary policy,price index,formal financial institutions,lending period and subject,regional economic development level and the legal regulation of private finance rate.Then,according to the empirical analysis on the influencing factors,selected five variables,namely six-month lending rate,bank reserve requirements rate,Wenzhou year-on-year loan balance,the interest rate of local CPI and informal and formal finance loan interest rate spreads.The explanatory variable is the composite interest rate of private lending in Wenzhou,establishing multiple linear regression model.In the multivariate linear regression model results,the formal financial loan interest rates,the difference between the folk financial interest rate and the formal financial lending rate have great influence on the interest rate of Wenzhou's folk finance,the statutory deposit reserve ratio has certain influence on it.The five explanatory variables are positively related to the private financial interest rate in Wenzhou.Finally,It is my future prospects of informal finance and my suggestions including the construction of private financial services system,continue to promote the interest rate market and the establishment of risk aversion system.