Research on the Coordination Development of Money Market and Capital Market in China

Abstract

Financial market is the link between the micro economy and macro economy. The government can control the country's economy through financial market. Money market and capital market are the important parts of the financial market, and the relationship of the two market influences the function of financial market. And weather the relationship of the two market is perfect or not, it has impacts on the national economic development. Only in the case of the mutual connection between the money market and the capital market, the overall function of the financial market can achieve the combination, which runs the entire financial system. Firstly, this paper analyzes and compares the money market and capital market. This paper defines the concept from the aspects of the definition, difference, connection and function of the capital market and money market. This paper studies the difference and connection between the two market. Finally, the significance of the coordinated development is discussed. Secondly, this paper briefly describes the current development of our capital market and money market. Key problems in the development of the two market are analyzed and compared. Finally, this paper summarizes the characteristics of the uncoordinated development of the capital market and the money market, and the main reasons of disequilibrium are presented. Thirdly, through the analysis of some practical situations of our country's money market and capital market, this paper puts forward some suggestions on how to coordinate the development of the two market. The corresponding recommendations are proposed from the following two aspects: (1) Developing money market: extend the main body of the money market, and accelerate the development of credit asset securitization. (2) Regulating the development of capital market: accelerate the transformation of securities market development model, position the securities market function, broaden and develop the bond market.