Research On The Effect Of Monetary Policy Under The Framework Of Double-Pillar Regulation

As the core of macro-control policy,the transmission efficiency and the channels of monetary policy to real economy are constantly changing.How monetary policy should play its role in the future and the impact of financial factors on the effect of monetary policy are obviously issues that should be discussed in depth in the new era.Both the Nineteenth National Congress and the Central Economic Work Conference held in 2017 put forward the idea of "keeping the bottom line of non-occurrence of systemic financial risks" and "financial service entity economic development".The central bank has begun to explore the construction of a Double-Pillar regulatory framework of macro-prudential policy and monetary policy to maintain financial stability and ensure stable economic development.At present,China’s financial and real economy development is facing the problem of risk accumulation(such as the rise of bad debts rate of banks,the rapid rise of enterprise leverage rate,the rise of asset prices,shadow banking and so on).The economic cycle and financial cycle are separated.How to prevent systemic financial risks has risen to the level of national focus.Monetary policy effect refers to the impact of monetary policy adjustment on the output of real economy.Under the background of the gradual improvement of the Double-Pillar regulatory framework,the study of monetary policy effect can reflect the degree of financial support for real economy.Therefore,it is of great theoretical and practical significance to study the effects of monetary policy under the Dual-Pillar regulatory framework from both theoretical and empirical perspectives.Under the background of rapid development of financial innovation,commercial banks’ financial management business,interbank deposit business,channel business and other credit businesses evade the restrictions of supervision or statutory deposit reserve ratio by " off-balance-sheet" and other means,creating a large amount of liquidity in the financial system.There is also a large inflow of credit in sectors that drive asset prices up,with limited support for other productive sectors of the real economy.Therefore,the effectiveness of monetary policy regulation relying on the original transmission mechanism continues to decline,and the original transmission channel can not fully reflect the transmission mechanism of the existing policy.From the perspective of enterprises,this paper expands the credit channels of monetary policy transmission to the real economy,and examines the importance of financing channels in the process of monetary policy transmission.After explaining the importance of financing channels by establishing theoretical models,the paper also quantifies the importance of financing channels in the process of monetary policy transmission through empirical tests.On the basis of establishing financing channels,this paper investigates the important financial factors that can influence the financing behavior of enterprises(financing channels)under the background of Double-Pillar regulatory framework,the theoretical mechanism of the impact of financial cycle and macro-prudential policies on the effect of monetary policy,empirically analyses their impact on the effect of monetary policy,and illustrates that they can influence the effect of monetary policy through financing channels.The conclusion shows that monetary policy has a significant impact on new investment in real economy.Financing channel plays a very important role in the transmission of monetary policy,and its intermediary effect accounts for 47.36% of the total effect.When monetary policy changes,financing channels have a greater impact on the investment scale of non-state-owned enterprises and small-scale enterprises,and the impact in the economic recession period is greater than in the economic boom period.Under the background of tightening monetary policy,the financial cycle will reduce the scale of enterprises’ new investment and enlarge the impact of tightening monetary policy on enterprises’ investment scale.Financial cycle can significantly influence the monetary policy effect through financing channels,and its impact on the monetary policy effect is mainly reflected in small-scale enterprises,non-state-owned enterprises and real estate enterprises.As for macro-prudential policy,macro-prudential policy will weaken the effect of monetary policy,indicating that preventing financial risks can reduce the amplification effect of financial cycle on monetary policy,and make the effect of monetary policy regulation return.Macro-prudential policy will influence the effect of monetary policy through financing,asset prices and risk-taking channels.Its impact on the effect of monetary policy is mainly reflected in small-scale enterprises,non-state-owned enterprises and real estate enterprises.The corresponding conclusions drawn in this paper also bring enlightenment to China’s macro-control policy.From the policy point of view,the central bank should improve the monitoring mechanism of financing intermediary channels in the transmission process of monetary policy in the future.In the process of regulation and control,we should not ignore the financial cycle represented by asset prices,pay full attention to the impact of the implementation of macro-prudential policy on the effect of monetary policy,mprove the ability of monetary policy to identify the asymmetry of intermediary effect of financing channels,and effectively identify the asymmetry of the impact of financial cycle and macro-prudential policy on the effect of monetary policy.On this basis,the policy-making authorities should improve the " Double-Pillar " regulatory framework of monetary policy and macro-prudential policy to support the development of real economy,and form an opportunistic choice mechanism for the coordination of monetary policy and macro-prudential policy.In the process of coordination between monetary policy and macro-prudential policy,attention should be paid to expectation management to ensure the effectiveness of the Double-Pillar regulatory framework.This has important theoretical and practical significance for further understanding the degree of financial support for the real economy and the coordination of the Double-Pillar regulatory policies.