What Drives China's Interbank Market?

WPIEA2009189 Image
Price:  $18.00

Author/Editor: Nathaniel John Porter, TengTeng Xu
Release Date: © September, 2009
ISBN : 978-1-45187-336-8
Stock #: WPIEA2009189
English
Stock Status: Available

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Description

Interest rates in China comprise a mix of both market determined interest rates (interbank rates and bond yields), and regulated interest rates (lending and deposit rates), reflecting China's gradual process of interest rate liberalization. We argue, using a theoretical model and empirical analysis, that the regulation of key retail interest rates diminishes the ability of the market determined rates to act as independent price signals, or as benchmarks for use in asset pricing and monetary policy. Further interest rate liberalization should, therefore, strengthen the information conveyed by movements in interest rates, allowing for the better pricing of risk and capital.

Taxonomy

Asset prices , Bank regulations , Banks and banking , Bond markets , Capital markets , Economic policy , Financial institutions and markets , Fiscal policy , Monetary policy , Pricing policy




More publications in this series: Working Papers


More publications by: Nathaniel John Porter ; TengTeng Xu