Research On The Transmission Of Credit Channel Of Monetary Policy In China From The Perspective Of Financial Disintermediation

Since the reform and opening up,China’s financial market has undergone continuous reforms and achieved prominent development.The degree of financial development can be measured from different angles and with different indicators,including: economic financialization level indicators,monetization rate indicators,financial efficiency indicators,financial flow indicators,financial asset price indicators,financial market competitiveness indicators,and financial disintermediation Indicators.Financial disintermediation is exactly one of the important manifestations of financial development.Financial disintermediation refers to the situation where an enterprise borrows money directly through the bond market or stock market instead of through banks or other financial intermediaries.In recent years,China’s economy is facing a downward pressure,although the monetary authorities have taken some monetary policy measures,however,at the real economic level,there are still many enterprises,especially private small and medium-sized enterprises experiencing financial constraints.Therefore,the obstruction of credit channel transmission is the main problem facing china’s monetary policy transmission.In order to solve the problem of blocked credit channel transmission,the central bank has pointed out many times since 2018 to exert the “three arrows” role of credit,bonds and equity,that is,to unblock the transmission of credit channels,develop capital markets,ease financing constraints of enterprises,enhance residents’ enthusiasm for consumption,the 2020 Central Economic Conference has reiterated this point,which has become the key step of central bank to unblock the current monetary policy credit transmission channels.It is not difficult to find that,exert the role of the second and third arrows is to develop the capital market,the essence of which is the advancing of financial disintermediation.The significance of advancing financial disintermediation for facilitating the transmission of credit channels lies in that whether the credit transmission mechanism is effective or not is determined to a large extent by the maturity of the financial market and the level of innovation of the domestic financial market.The efficient and developed financial market is the basis of the usual transmission of monetary policies.Under an efficient and multi-level financial market system,the credit market and the bond market jointly maintain the relative equilibrium of the financial market,affect each other,and jointly promote the steady development of the economy.To this end,the core issue raised in this paper is: “What is the current way of China’s financial disintermediation to influence the credit channels,and what is the effect?”Based on this point,it is tried in this paper to study the following issues: first,from the perspective of micro subjects to conduct in-depth study of the credit transmission channel effect of monetary policies.Second,to study the influence of financial disintermediation on the transmission of credit channels.Thirdly,the influence of heterogeneity of micro subjects on financial disintermediation is studied by combining branch channels of credit Channels.Fourth,the influence path of the above mechanism of action and its influence mechanism are studied.In the empirical study,according to the classification of credit channels,in this paper,it is made an in-depth study on the transmission of credit channels under the background of financial disintermediation from the four perspectives of bank credit channels,bank balance sheet channels,enterprise balance sheet channels and resident balance sheet channels respectively,forming a systematic research framework.In terms of data and methods,this paper is based on Bankscope database,GTA CSMAR database,Wind database,the website of the People’s Bank of China,Chinabond.Com.Cn and manually collected data,and by comprehensive use of fixed effect regression model(FEM),dynamic panel generalized method of moments(GMM),redundancy analysis(RDA)test method,MS(M)-AR(P)model,mediating effect model and SVAR model to carry out research.Firstly,the concept of financial disintermediation in this paper is defined,and two indexes are constructed,and the state transfer test is carried out for the characteristics of the index.Based on the benchmark regression of each chapter,in this paper,it is studied the influence of financial disintermediation on each branch channel of credit channels.After the robustness test is carried out by integrated application of replacing core explanatory variables,GMM model,excluding possible interpretation and changing sample interval,the asymmetry of micro subjects’ heterogeneity on financial disintermediation is further explored.Finally,from the perspective of mechanism,it is discussed in the paper the mediating effect within the chain of “monetary policies → financial disintermediation → bank credit channels”,the impact of financial disintermediation on risk-taking of banks,and the impact of “disintermediation correction” effect on the chain of “monetary policies → financial disintermediation → bank balance sheet channel”,and whether the chain of “monetary policies → financial disintermediation → enterprise balance sheet channel” is “driven by cost”,as well as the related problems of risk bearing of credit approval.In the part of residents,it is firstly verified in this paper the existence of the balance sheet channel of residents,and then analyzes the impact of financial disintermediation on the balance sheet channel of residents by comparing the changes before and after introducing financial disintermediation variables into the channel.Finally,following conclusions are concluded:1.The conclusion on credit channel’s transmission effect of micro subject:(a).Monetary policy is mainly conducted by joint-stock banks,urban and rural commercial banks.Meanwhile,banks with low capital adequacy ratio,poor asset liquidity and high debt structure are more vulnerable to affect monetary policy.On the contrary,banks with good liquidity and high debt ratio is able to weaken monetary policy’s effect by adjusting the balance sheet,especially for urban commercial banks.(b).The tight monetary policy mainly affects private enterprises,enterprises with low asset mortgage,short listing time and high-tech enterprises.(c)Monetary policy affects consumption through house-price information,which is an important intermediary variable in residents’ balance-sheet channel.2.The influencing conclusion on financial disintermediation on credit channels’ transmission effect:(a)The effect on financial disintermediation on urban commercial banks and rural commercial banks,and for banks with low capital adequacy ratio,poor asset liquidity and high debt structure are more obvious without the impact of monetary policy.Under the impact of tight monetary policy,financial disintermediation’s development in China is not enough to weaken the impact of monetary policy and transmission at this stage.In addition,it’s useless though banks actively adjust the balance sheet structure.(b)Financial disintermediation’s deepening is able to alleviate corporate financing constraints.Meanwhile,it can also weaken the impact of monetary policy on corporate asset liability’s channel transmission under the tight monetary policy.The above functions are more obvious for private enterprises and those with lower asset mortgage,but not obvious for high-tech enterprises and listed enterprises short listing time.(c)Financial disintermediation is able to improve the burden of real estate on residents’ consumption,and promote the development of monetary policy’s balance sheet channel in a healthier direction.Meanwhile,its development has enhanced the uncertainty of the effect on real-estate wealth and monetary policy variables on household consumption.3.The influence mechanism of financial disintermediation on credit channels’ transmission effect.(a)The influence mechanism of "monetary policy → financial disintermediation → bank credit channel" is in two paths."Monetary policy → bank credit" is the direct effect,and tightening monetary policy reduces bank credit.Moreover,"monetary policy → financial disintermediation → bank credit" is the indirect effect.Direct effect has more influence at present,which relates to financial disintermediation’s development.(b)A core mechanism of "monetary policy → financial disintermediation → bank’s balance sheet channel" chain is "disintermediation correction" effect.However,it’s offset under the impact of monetary policy.(c)Under the chain of "monetary policy → financial disintermediation → enterprise’s balance sheet channel",financial disintermediation doesn’t exert influence by "cost driven" mechanism.(d)Increasing or reducing bank risk-taking(risk-taking measured by credit approval)can’t effectively alleviate financing constraints and stimulate enterprise’s investment.(e)The variable of financial disintermediation or the broad financial disintermediation can’t affect the banks’ risk-taking.(f)In the chain of "monetary policy → financial disintermediation → bank credit channel",there are difference between the results of generalized index of financial disintermediation and benchmark regression,which is mainly caused by different influence mechanisms.(g)In effect,monetary policy’s price tools are similar to quantity ones,and the effect of regulation tools’ transformation from quantity to price is more obvious.The following policy recommendations are proposed based on the above conclusions:1.Further deepening the structural monetary policy’s implementation.(a)Apart from banks,we should consider the capital adequacy ratio’s low level,asset liquidity and liability structure,and banks’ ability of weakening the impact of monetary policy by adjusting the asset liability structure,so as to implement more detailed differential reduction,and achieve the directional release in key areas(private,high-tech,agriculture and rural areas)Domain),and the desired effect of monetary policy.(b)Structural monetary policy should support fiscal policy and financial innovation to work together.(3)We are supposed to comprehensively apply quantitative and price-based regulatory tools,implement a more accurately structural monetary policy,and promote the regulatory methods’ phased transformation in monetary policy regulation.2.Standardizing long-term dynamic supervision rules and guide the financial disintermediation’s overall layout.(a)Financial disintermediation’s development trend should be viewed from the angle of development,its impact on monetary policy regulation and micro-subject level should be emphasized,the layout should be made in advance,and precautions should be taken.Moreover,the risk contagion of financial market should be vigilant,and the long-term dynamic supervision of financial disintermediation should be standardized when focusing on the micro subject’s heterogeneity.(b)The positive role,coordinated development of financial disintermediation,monetary policy and real economy should be paid more attention,so as to give a full play in financial disintermediation.3.Continuously deepening financial disintermediation’s development and ease the enterprises’ financing constraints.(a)Building a multi-level capital market,promoting its development of stocks and bonds,and easing enterprises’ financing constraints.(b)Give full play to the advantages of city commercial banks to customers,flat organizations,slightly lower loan standards than large commercial banks,and mainly serve small and medium-sized enterprises.Meanwhile,developing the small and medium-sized financial institutions system based on local conditions,so as to better achieve the purpose of alleviating the "financial difficulty and expensiveness" and unblocking the monetary policy’s credit channel transmission.4.Guiding financial disintermediation to optimize real estate’s influence on residents’ balance sheet.(a)Focusing on the effect on the real estate market’s abnormal development on the contraction of residents’ consumption,adhering to real estate regulation and control,"living without speculation",and easing the constraints of residents’ liquidity by improving rental mechanism(such as public rental housing);(b)Further deepening financial disintermediation,broadening channels for resident enterprises’ investment and financing,and promoting the rapid development of the whole economy and society.(c)Concerning at the uncertainty brought by financial disintermediation’s development,and guiding the financial disintermediation.5.Optimizing the dynamic supervision of bank’s balance sheet and attaching importance to the bank’s risk-taking.(a)Concerning at the dynamic changes of the bank balance sheet timely,and incorporating the taxpayer into the supervision system of monetary policy,so as to prevent balance sheet’s excessive expansion.(b)Further improving the assessment standards of MPA,which makes supervisors assess and warn the impact and risk more effectively,and assess the problems that may arise from the future financial disintermediation in advance,so as to make the systematic risks more controllable.