Core conclusion
The people's Bank of China has been promoting the market-oriented reform of interest rate. With the continuous release of the dividend of the quoted interest rate reform in the loan market, the loan interest rate of the real economy has decreased steadily. In this article, we combed the background, process and contingent impact of interest rate marketization in Germany on the financial system.
The background of interest rate marketization in Germany: from interest rate control after the banking crisis in 1931 to the needs of economic regulation in the 1960s.
After hyperinflation ended in 1924, the German economy entered a period of expansion, and foreign banks began to enter Germany. In the face of competition, local banks in Germany began high-risk business and accumulated a lot of risks. The collapse of danat bank in 1931 triggered the banking crisis in Germany. Germany finally introduced the German credit act in 1934, and the government obtained the regulatory authority of all German banks except the central bank. Under this management, deposit and loan interest rates and various financial market interest rates are controlled, and the German central bank affects the interest rate level through the change of discount interest rate. However, after controlling the interest rate for more than 35 years, commercial banks have been able to provide customers with deposit interest rates that exceed the deposit control interest rate through some complex transactions, and the effectiveness of interest rate control has decreased significantly; When the economic growth began to decline, the pricing effectiveness of the central bank for policy interest rates was much lower than that of the market.
German interest rate marketization process: from 1962 to 1967, Germany completed the interest rate marketization reform in five years. Since Germany has implemented the free trading of national debt since the 1950s, when banks began to reform, they were already at a higher starting point than Japan. From 1962 to 1967, when interest rate regulation was completely abolished, the whole process of interest rate marketization in Germany lasted only five years.
The experience of interest rate marketization in Germany: the uniqueness of the banking system made it pass through the stage of interest rate marketization smoothly, and did not trigger the banking crisis like other developed economies.
The success of German interest rate marketization is that it did not trigger a banking crisis. In our opinion, this is related to the low profit orientation of German banks and the clear division of labor in the banking system. Most German banks are not profit maximizing entities in a strict sense. Superimposed with a clear division of labor model, various German banks perform their respective duties, so that there is no horizontal incentive competition after the marketization of interest rate, and the debt cost of financial institutions remains stable.
The German case gives China two enlightenments in the interest rate marketization: 1) the self-discipline mechanism of financial peers plays an important role; 2) All kinds of banks have a clear division of labor and perform their respective duties, which is conducive to the stability of the banking system after the interest rate marketization.
Risk tip: inadequate understanding of the Bundesbank's monetary policy.
