Research On The International Experience Of Interest Rate Corridor Regulation And The Construction Of China’s Target Model

In recent years,China’s monetary and financial sector has witnessed a unique monetary phenomenon.Under the circumstance of abundant market liquidity,there are "money shortage" and "asset shortage" in the inter-bank market,and it is difficult for small and medium-sized enterprises to apply for loans.The cost of funds through private lending is very high.The problem of "wide quantity and high price" in the financial market is prominent.This reflects that under the background of accelerating financial innovation and "financial disintermediation",the endogenous nature of money is strengthened,and the difficulty of quantitative regulation is increased.It is difficult for banks to achieve both quantitative and price targets of monetary policy,so it is necessary to build a regulatory framework of interest rate corridor to achieve price stability.Post-Keynesian endogenous money supply theory holds that money supply is endogenous to real economic activities,while interest rate is exogenously determined by the policy target interest rate set by the central bank,which has long "predicted" the inevitability of interest rate corridor regulation.Marx’s monetary theory has an important guiding significance for the regulation of interest rate corridor.Its enlightenment lies in that the central bank can use the interest rate corridor regulation and macro-prudential policy to control the interest income and non-interest income of commercial banks comprehensively,so that the banking industry can obtain the average profit margin of the society,which will help to make the finance return to its own position and better serve the real economy.Therefore,the construction of interest rate corridor regulation must adhere to the guiding position of Marx’s monetary theory.In the past 40 years since the reform and opening up,the People’s Bank of China has changed from the earliest direct credit control to the current indirect monetary aggregate control.It has also initially tried to construct an interest rate corridor control mechanism.Due to the excessive objectives of the current monetary policy framework and the lack of effective price control,the fluctuation of market interest rates can not be suppressed.The credibility of the interest rate corridor and the credibility of the central bank are challenged,which affects the realization of monetary policy objectives.Through the analysis of China’s micro-money creation mechanism,it is found that the endogenous and exogenous attributes of money and interest rates are strengthened,the difficulty of quantity regulation is increased,and the possibility of price regulation is raised.The path differences in the history of monetary policy development between Britain and the United States indicate that the choice of monetary policy framework is closely related to the stage of economic development and the degree of financial development of a country.With China’s economy approaching steady-state growth,the construction of interest rate corridor regulation is of great importance and urgency.Therefore,it is necessary to further speed up the construction of interest rate corridor regulation,overcome the inherent shortcomings of monetary aggregate regulation,and realize the transition to a price-based regulatory framework.The establishment of foreign interest rate corridor regulation generally requires benchmark policy target interest rate,reasonable corridor width,coordination with open market operation and reserve system with liquidity management function.Under the impetus of the People’s Bank of China and the continuous market-oriented reform of interest rates and exchange rates,China has initially met the above basic conditions.There are also some obstacles,especially the distorted economic and financial structure poses a challenge to the regulation and construction of interest rate corridor.Therefore,on the basis of fully drawing lessons from the advanced experience of foreign countries and the characteristics of China’s economic transition,the target model of interest rate corridor regulation in China is constructed.Inflation targeting system is regular and transparent.It can strengthen the communication between the central bank and the public,and is conducive to forming and guiding public expectations.Therefore,it is necessary to implement inflation targeting system.Because Shibor is market-oriented,basic and dominant,the regulation of interest rate corridor should take Shibor as the benchmark interest rate,and reasonably set the width of interest rate corridor with full consideration of regulation cost,central bank tolerance and exogenous shock type.Considering the characteristics of China’s economic transition and the goal of price stability and financial stability of the People’s Bank of China,the interest rate corridor also needs the balance reserve system to achieve the dual objectives.In view of the existing problems,the first is to enhance the effectiveness of interest induction.We should strengthen the benchmarking of Shibor,improve the framework of qualified collateral and the availability of financing,and change the average assessment method of the reserve system during the period to the voluntary reserve system.The second is to strengthen the expected guidance of the central bank.We should build a regulatory framework with two pillars of inflation targeting plus macro-prudential policy,and improve the independence of the central bank and the transparency of monetary policy.The third is to construct sound and smooth transmission of monetary policy.We should strengthen the construction of financial market,raise effective micro-market behavior,and improve the ability of analysis and prediction to deal with the time lag of monetary policy.