During the WTO transitional period,we will confront the regulated floating interest rate system,which would be both a challenge and an opportunity to the small and medium sized banks.

This paper extends on the base of risk-free interest rate structure and introduces the model of floating interest rate structure.

In this paper,based on analysis of the development trend of international exchange rate system,it is held that the direction of the exchange rate system reform in China is to bring about floating exchange rate system.