Research On The Development Of Bond Market And The Role Of Monetary Policy

Chinese bond market has developed rapidly in recent years, the market continues to expand the scale, product variety is rich gradually and the number of participants continues to increase. However, compared with developed bond market, bond market in China is still saving problem,such as the whole small scale, not strong liquidity, imperfect supervision system, influence the effective implementation of monetary policy and macroeconomic sustained and healthy development. Therefore, in order to achieve the established policy objectives, at present our country’s bond market is underdeveloped, study how to remove barriers, has important practical significance to establish a mature bond market so as to improve the validity of monetary policy transmission,. And to the conduction of monetary policy as a starting point, to study the problems of the development of the bond market, and have important theoretical significance for the development of the theory of the bond market, but also has important significance to the theory of monetary policy transmission.The idea of this study are as follows:Firstly, analyses the development of Chinese bond market. The history of the development of the bond market is long, but the real formation began in the 80’s of the last century. After the reform and opening up, the rapid development of Chinese bond market, and gradually experienced the OTC market period(1981-1991),(1991-1997) during the period of exchange market and the inter-bank bond market as the main period(since 1997). At present, Chinese bond issuance market issuance way diversified, the issuance of bonds issuing scale gradually expanded, gradually rich, the issuance of term structure diversified; trading market mechanism diversity, more complete variety, large scale, strong liquidity, the types and number of investors continue to increase, the bond market balance continues to expand, bond rating system, trusteeship system, supervision system and related laws and regulations continue to improve.Secondly, monetary policy transmission channels in the bond market was analyzed in theory. This paper respectively analyses three aspects from the bond market in the monetary policy transmission function, the development of the bond market impact on money supply and demand, monetary policy conduction in the bond market of the two phase, the conduction of the concrete can be divided into: the role of monetary policy on bond market that the first stage, the role of the bond market to the real economy second stage, and joins the bond market factors based on IS-LM model of Keynes, constructs a new theoretical model. Research shows that, the bond market plays an important role in the transmission of monetary policy.Thirdly, this paper makes an empirical analysis of monetary policy in the first phase of the bond market conduction, stage effect of monetary policy on bond market. The implementation of monetary policy has two ways of the supply of money and interest. A path for the money supply to the role of bond market, research thought, to join the expected factors will make money supply to strengthen the role of the bond market, but the effect is not obvious. Another way is the role of the interest rate on the bond market, the article compares the role of official interest rates and market interest on the bond market. Research shows, compared with the official interest rate, effect of the market interest rates on the bond market is significantly higher, illustrate the efficiency of adjusting the benchmark deposit and loan interest rates in our country at present is low, the marketization of interest rate is imperative; but the role of market interest rate has not achieved the expected results. Due to the bond market problems, the first stage of conduction effect is overall poor.Fourthly, this paper makes an empirical analysis of monetary policy in the second phase of the bond market conduction that is bond price changes on the real economy effect. Role of the bond market to the real economy mainly through the effect of consumption and investment, and then through the consumption and investment multiplier effect to promote the development of real economy. The multiplier effect has been recognized in economic circles, so the article mainly makes an empirical analysis of the role of the bond market changes on consumption and investment.Research thinks, there is a long-term equilibrium relationship between bond price and the actual consumption, and the two changes in the same direction, bond prices will bring obvious influence to the actual consumption level. However, the smaller the bond price volatility on consumption level of short-term effect. The relationship between the bond market value and the actual investment moves in the same direction. However, the bond market value is less affected the impact of actual investment. The research results show that, the bond market problems lead to monetary policy in the second stage of bond market poor conduction effect, reduce the role of the bond market in the transmission mechanism of monetary policy.Fifthly, the article learns from the developed bond markets-- the U.S. bond market experience, combined with the results of empirical analysis, analyses problems of Chinese bond market in the transmission mechanism of monetary policy. China’s bond market in recent years has although made obvious progress, but because of shorter development time, bond market has lots of problems, for example, the bond market is a shortage of supply, demand is not vigorous, liquidity is not strong, supervision system is not perfect. The bond market problems lead to monetary policy in the bond market channel transmission efficiency is low, is not conducive to the implementation of monetary policy.Finally, combining with the development stage of Chinese bond market and the existing problems, the author puts forward the countermeasures and suggestions for the development of bond market in our country from the angle of perfecting the monetary policy transmission.The innovation of this paper lies in: the first is studying the role of monetary policy transmission in the bond market systematically; the second is joining the bond market factors based on IS-LM model of Keynes, constructs a new theoretical model, makes a theoretical analysis of the role of the bond market in monetary policy transmission by using this model; the third is joining the expectation factor in the study of the role of money supply to bond market, using ARIMA model dividing monetary policy into anticipated and unanticipated monetary policy, then analyze if the role of anticipated and unanticipated monetary policy on the bond market is different; the fourth is to study the interest rate on the bond market function, considering the actual situation of market-oriented interest rate, uses the method of comparative analysis to study if the official role of interest rate and market interest rates of two kinds effect on bond market is different, in order to provide references for the bond market participants, regulators and monetary authorities after the marketization of interest rate.