Financial Leasing, Regulatory Arbitrage and Interest Rate Liberalization: Empirical Evidence In China

Abstract

In the view of financial structure, this paper studies the relationship between financial leasing and the process of interest rate liberalization based on the dynamic panel model, and applies system the quantile estimation to explore the mechanism of financial leasing and interest rate liberalization. The conclusion of this research shows that financial leasing helps to improve and promote the process of interest rate liberalization. Regulatory arbitrage is an essential feature of financial leasing, because financial leasing is classic credit substantially and focusing on channel service in financial. It can expand bank credit to promote the development of the real economy.