The Influence Of China's Monetary Policy And Macroprudential Policy And Their Coordination On Shadow Banking

In recent years,China's financial system has become increasingly complex.Interbank business and financial products form a large number of highly related shadow banking systems through different channels of non-bank financial institutions.On the one hand,shadow banking is the inevitable result of financial innovation and financial market development,which can enhance the vitality of financial market.On the other hand,while the shadow banks lengthen the capital chain,the leverage rate keeps rising,which aggravates the volatility of financial market.In addition,with the economy continue to fall the downward funds constantly flow from reality economy to virtual economy,which aggravates the financing dilemma of the real economy.The tool types of monetary policy and macroprudential policy in China have been further improved in recent years.They have exerted extensive influence on shadow banking through different channels and modes.However,there are still have some drawbacks in the process of regulating shadow banks of the two macro control policies.It is urgent for them to work together to guide and regulate the development of shadow banking.On the basis of the existing research,this paper redefines the shadow banking in China,systematically combs the theoretical framework of monetary policy and macroprudential policy and their influence mechanism on shadow banking,and profoundly studies the influence of monetary policy and macroprudential policy and their coordination on shadow banking in China.Specifically: Firstly,this paper combs the current research situation at home and abroad respectively from three aspects: the relationship between monetary policy and shadow banking,the relationship between macroprudential policy and shadow banking,and the coordination of monetary policy and macroprudential policy.On this basis,it induces and summarizes the contributions and shortcomings of relevant research;secondly,it analyses the influence mechanism of monetary policy on shadow banking,the influence mechanism of macroprudential policy on shadow banking,the necessity of the coordination of monetary policy and macroprudential policy and the influence mechanism of the coordination of monetary policy and macroprudential policy on shadow banking,which provide theoretical support for the following research.Thirdly,this paper evaluates and diagnoses the policy practice of the influence of monetary policy and Macro Prudential Assessment system on shadow banking in China.And then we comprehensively summarize the policy practice experience and enlightenment of monetary policy and macroprudential policy on shadow banking in the three major developed economies of the United Kingdom,the United States and the Euro area.Finally,this paper empirically examines the influence of China's monetary policy on shadow banking,the influence of China's macroprudential policy on shadow banking and the influence of the coordination of China's monetary policy and macroprudential policy on shadow banking by means of mathematical modeling and econometrics,and meanwhile we put forward corresponding policy recommendations and prospects for the research results.The main conclusions of this paper are as follows:(1)This paper empirically examines the influence of monetary policy on shadow banks by using the Smooth Transform Vector Autoregression(STR)model.The results show that when the shadow banks develop slowly,because the business model of commercial banks is relatively single,the off-balance-sheet shadow banking business model of banks is relatively simple,the role of loose monetary policy in promoting the size of shadow banking is moderate.With the business model innovation of shadow banks and the development of financial market,loose monetary policy plays an important role in promoting the rapid growth of shadow banks.In addition,the change of economic development will promote the growth of shadow banking scale in different ways.(2)This paper empirically examines the influence of macroprudential policy on shadow banks by using Markov Switch transfer Vector Autoregression(MS-VAR)model.The results show that the influence of Macro Prudential Assessment system on shadow banks is different with the different economic growth rate.When the economy is in a low-speed decline stage(before 2015),the main form of Macro Prudential Assessment system in China is the dynamic adjustment mechanism of differential deposit reserve to manage narrow-sense credit of commercial banks.During which time the effect of macroprudential supervision is limited.The size of shadow banks is not decreasing but rising.When the economy is in a rapid downward stage(after 2015),the expansion of the shadow business of commercial banks has been greatly reduced under the influence of Macro Prudential Assessment system in China from both aspects of scale and growth.(3)This paper uses Dynamic Stochastic General Equilibrium(DSGE)model to simulate the influence of the coordination of monetary policy and macroprudential policy on shadow banks.The results show that the coordination of loose monetary policy and macroprudential policy restricts the transfer of funds from traditional banks to shadow banks,lowers the possibility of financing from real enterprises to shadow banks from both scale and financing price,which is the best way of policy collocation conducive to the development of real economy.Through the above analysis,this paper argues that we should implement a prudent and loose monetary policy and a tight macroprudential policy to cope with the problems of China's shadow banks,to provide a suitable monetary environment for financial institutions while avoiding the financial risks caused by procyclical credit.In the future,the coordination of monetary policy and macroprudential policy should be applied to a wider range of areas like financial intermediation and financial market.The timing,rules,tools,objectives,frequency and intensity of the coordination still need to be further scientifically and rationally designed.