Research On The Marketization Effect Of LPR Reform

The reform of interest rate marketization is of great significance to the improvement and development of my country’s financial market.The key to the reform lies in the marketization of deposit and loan interest rates.After my country gradually liberalizes the control of deposit and loan interest rates,the core is to build a market-oriented credit market interest rate formation.mechanism.As early as 2013,my country launched the loan market quotation rate LPR for the first time,but in the actual operation process,due to the existence of the"dual-track system",the interest rate transmission mechanism was blocked,and the linkage between market interest rates was low;Existence also makes the financing difficulties and expensive financing problems faced by SMEs unable to be properly resolved.In the following six years,LPR failed to achieve the expected reform effect.Therefore,the People’s Bank of China launched the reform of the LPR quotation mechanism in 2019,with the intention of substantially promoting the marketization of loan-side interest rates.Therefore,taking the LPR reform as an entry point and studying the marketization effect of its reform will help promote the deepening of the interest rate marketization reform and help the development and improvement of my country’s financial market system.By sorting out the relevant literature and theories of LPR reform,this paper believes that LPR reform can enhance the linkage effect of interest rates between different markets by dredging the interest rate transmission mechanism.After the reform,LPR interest rate can effectively alleviate the improvement of small and medium-sized enterprises by replacing the loan benchmark rate and breaking the coordinated pricing behavior of banks.credit financing environment.Based on this,this paper puts forward two hypotheses:First,the LPR reform will enhance the linkage between market interest rates and loan interest rates;second,the LPR reform will help to increase the scale of credit financing for SMEs.According to hypothesis 1,this paper takes the money market interest rate,LPR quotation interest rate and loan actual market interest rate as the research objects,and uses the event study method,Granger causality test and elastic coefficient analysis to verify the hypothesis.The empirical results show that the operation of LPR is very important for short-term currency The impact of market interest rates is more significant,while the impact of long-term money market interest rates is relatively weak.After the LPR reform,money market interest rates have become the Granger cause of loan interest rates,and the transmission efficiency of money market interest rates to loan market interest rates has improved significantly compared to before the reform.According to the second hypothesis,this paper takes Shanghai and Shenzhen A-share small and medium-sized enterprises as the research object,and uses the research method of breakpoint regression to conduct empirical tests.The results show that the scale of SMEs’ credit financing has been improved to a certain extent after the LPR reform.Finally,this paper puts forward relevant policy suggestions on how to further determine the future reform direction of LPR and improve the market-oriented nature of its reform based on the empirical test results,relevant international experience and my country’s actual development.First,improve the bank loan pricing mechanism and strengthen the construction of the FTP system;second,flexibly adjust the MLF interest rate and adjust the scope of primary dealers;third,the regulatory authorities help banks reduce operating costs through multiple channels;fourth,continue to deepen the reform of LPR formation Fifth,establish a sound basic loan interest rate system;sixth,adopt a classified assessment method for financial institutions and improve credit fund supervision measures.