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The Responding Strategy of Interest Rate Marketization in Less-developed Areas:Micro Mechanism and Macro Regulation and Control
Pages: 40-44
Year: Issue:  12
Journal: Xi'an Finance

Keyword:  interest rate marketizationfinancial reform;
Abstract: The main problems of the interest rate marketization process in the less developed areas are the raising of deposit interest rates and lowering of the loan interest rates, which is an adjustment made by banking sector institutions, especially small rural financial institutions under the pressure of counterpart competition rather than their initiative action under their uprising gains. The result is the synchronized downfall of the asset profit ratio of these agencies and it’ s impossible to develop. So, in the process of interest rate marketization, the priority of macro regulation and control and regulators should be focused on pushing the establishment of fair competition and smooth admission system. At present the supervision on the entity banking financial institutions should be loosened to keep a relatively fair position in competition with the internet financial institutions. Large banks’ task is to establish and perfect the internal funds transfer pricing system and form a full coverage of hard financial(budget) constraints. Small and medium-sized banks newly entering the market should avoid unfair competition for the one-sided pursuit of growth rate. Small rural financial institutions should be rational to the new pattern of competition under the condition of the interest rate marketization, contract low efficiency and low income business and actively remise market share according to the reality.
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