A Case Study of Interbank Deposit Fund Market: Sustainable Emerging Markets in China
Abstract
The first batch of interbank deposit funds was issued in China on December 3, 2021, and three batches of interbank deposit funds were issued in China as of May 2022, totaling 17 funds. As an emerging market, the interbank deposit fund market is a gap area of academic research. This paper analyzes the background of the development of the interbank deposit fund market in China, summarizes the current development of interbank deposit funds based on relevant data, introduces the specific profit model of interbank deposit funds, and explains their main advantages over short-dated bond funds and money funds. At the same time, this paper also discusses the main constraints faced by interbank depository funds, proposes corresponding solutions, and looks into the future development direction of China's interbank depository fund market. The above research plays a role in the sustainable development of the interbank depository fund market.
Downloads
References
Allen, F., Hryckiewicz, A., Kowalewski, O., & Tümer-Alkan, G. (2014). Transmission of financial shocks in loan and deposit markets: Role of interbank borrowing and market monitoring. Journal of Financial Stability, 15, 112-126.
Chen, Guojin, Jiang, Xiaoyu, Liu, Yanzhen & Zhao, Xiangqin. (2021). Asset transparency, regulatory arbitrage and bank systemic risk. Financial Studies (03), 18-37.
Chen, H., Chen, Q., & Gerlach, S. (2013). The implementation of monetary policy in China: The interbank market and bank lending. In Global banking, financial markets and crises. Emerald Group Publishing Limited.
Coen, P. (2020). The industrial organisation of financial intermediation (Doctoral dissertation. The London School of Economics and Political Science (LSE)).
De Lisa, R., Zedda, S., Vallascas, F., Campolongo, F., & Marchesi, M. (2011). Modelling deposit insurance scheme losses in a Basel 2 framework. Journal of Financial Services Research, 40(3), 123-141.
Ge Yan. (2014). Inter-bank certificates of deposit and inter-bank business development. Beijing Financial Review (04),145-153.
Guo, Hongyu & Li, Ye. (2021). The choice of long-end benchmark interest rates in the money market - A discussion on the feasibility of interbank deposit rates. Times Business & Economics, 9, 41-47. doi:10.19463/j.cnki.sdjm.2021.09.009.
Hannam, M. (2013). Money Market Funds, Bank Runs and the First Mover Advantage. Bank Runs and the First Mover Advantage (January 4, 2013).
Jiang Chao, Jiang Peishan & Sun Liping. (2020). Development history, difficulties and suggestions of interbank certificate of Deposit market. China Money Market, 11, 9-13.
Jiang, B., Tzavellas, H., & Yang, X. (2022). Deposit Competition, Interbank Market, and Bank Profit. Journal of Risk and Financial Management, 15(5), 194. https://doi.org/10.3390/jrfm15050194
Liu Shida, Zhang Ming & Wang Zhe. (2017). The interbank deposit market with Chinese characteristics: international experience, characteristic facts and potential risks. Financial Market Research, 11, 101-116.
Long Yi & Zhang Hu. (2017). Interbank certificates of deposit: development background, operation mode and future outlook. Financial Vertical, 6, 10-19+52.
Macedo, D., & Troster, V. (2021). Liquidity shocks and interbank market failures: the role of deposit flights, non-performing loans, and competition. Journal of Economic Interaction and Coordination, 16(4), 705-746.
Sümer, T. P., & Özyıldırım, S. (2019). Do banking groups shape the network structure? Evidence from Turkish interbank market. International Review of Financial Analysis, 66, 101387.
Yao, H.W. & Hui, A.L. (2017). Development dynamics, potential risks and reform path of interbank depository receipts in the banking industry. Financial Regulation Research, 12, 68-80. doi:10.13490/j.cnki.frr.2017.12.005.
Summer. (2022, May 30). About the interbank certificate of deposit fund, please don’t listen to the legend – HCItInfo. Retrieved August 11, 2022, from About the interbank certificate of deposit fund, please don’t listen to the legend – HCItInfo website: https://www.hcitinfo.com/oe0nhfweq0u7.html
