The Rise of Chinese Money Market Funds

Kate McLoughlin and Jessica Meredith
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Kate McLoughlin: Reserve Bank of Australia
Jessica Meredith: Reserve Bank of Australia

RBA Bulletin (Print copy discontinued), 2017, 75-84

Abstract: Money market funds (MMFs) pool funds in an investment vehicle to invest in short-term, highly rated securities. The MMF sector in China has grown rapidly over the past few years and is now the world’s second largest by assets, though it is small compared with China’s domestic bank deposits. This growth has been driven by investors attracted by high yields relative to bank deposits and technological developments that allow Chinese MMFs to offer a convenient cash management service. Chinese MMFs differ from similar products in many other countries: they tend to be more leveraged, and they offer more liquidity and maturity transformation. Nonetheless, recent regulatory reforms to address vulnerabilities have taken a similar direction to reforms globally.

Keywords: China; Chinese money market funds; MMFs; Chinese financial markets; Funds management; Asset management; Yu'E Bao; Chinese interest rates; Liberalisation; China funding markets; Mutual funds; China leverage; Regulation of Chinese mutual funds; Chinese authorities; MMF investments; MMF reforms; Repo market; MMF assets; MMF liabilities; China's money market (search for similar items in EconPapers)
Date: 2017
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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