The Research On China's Financial Structure And Its Impact On The Monetary Policy Transmission Channel

Financial structure generally refers to the state of the combination of the existence, distribution, relative scale, correlation and interaction of the component elements of the entire financial system. In the development process of financial industry, structural coordination has the equal importance as the aggregate growth; especially when the aggregate of the financial assets has increased to a certain degree, the improvement of efficiency is always constrained by financial structure problems. Financial structure not only determines the soundness of the financial industry, but also greatly influences the effectiveness of the monetary policy transmission.After more than 20 years of rapid development of Chinese financial industry, the aggregate of the financial assets has reached quite a sizable scale; the problems of financial structural imbalance are gradually emerging in terms of financial institutions structure, financial market structure, financial asset structure and financial opening structure, along with the economic development and deepening of "Reform and opening up". These problems will lead to low financial efficiency and insufficient financial practice, and cause the impeded transmission of the monetary policy, thus restricting the development of financial industry and the contribution made by finance to the economic development. How to adjust and optimize financial structure to upgrade the level and boost the efficiency of the financial system, and guarantee the effectiveness of the monetary policy transmission? This has become an urgent issue to be studied and resolved in Chinese economic research.Centering on the internal relationship of financial structure and monetary policy transmission mechanism, this paper analyses a series of specific financial structures and the corresponding monetary policy transmission channels, and examines how the financial structure affects monetary policy transmission channels, from the four aspects of financial institutions structure, financial market structure, financial asset structure and financial opening structure. By adopting empirical analysis, the paper points out that the status quo of financial structure in China leads to the fact that monetary policy transmission is conducted mainly by bank credit channel, with the functions of other channels such as interest rate, asset prices and exchange rate still being poor. The paper introduces the practice of advanced countries in this field and suggests that domestic financial structure development needs the progress of both financial market and intermediaries. The paper argues that only completely adjusting and optimizing financial structure from every aspect can enhance financial system functions, raise financial efficiency and improve the effectiveness of the monetary policy transmission.