The Research On The Impact And Its Countermeasures Of Contemporary Financial Innovation On Money Supply And Demand

Financial innovation is the new thing created by recombining and reforming various elements of the financial field. Its appearance has brought significant changes in the economic and financial field and a profound influence on the micro-economic behavior of the main players. It makes money supply as an intermediate goal of monetary policy facing many challenges. China is a large developing country, and the domestic market is also growing economic integration into the world economy. The financial innovation wave sweeping across the globe will happen in our country, and China's central bank will also face the question of how to adjust monetary policy to meet the challenges of financial innovation.Based on many scholars'research results, the author makes a systematic analysis of the impact of financial innovation on money supply, and researches the three problems of currency control under the financial innovation background: the first is monetary needs brought about by virtual economic development. It's thought that whether it should be met is decided by the increasing effective money supply; the second is currency control caliber under financial innovation. The author thinks that the current monetary control caliber should change from narrow currency credit to a broader currency scale; the third is the effectiveness of interest rate policy in the financial innovations background. It's believed that changes in interest rates in the background of financial innovations have even greater impact on the financial markets than physical control. Finally, the author discusses the adjustments of intermediate goal of monetary policy by China's practice and the financial regulatory measures orientation in financial innovations background. It's believed that although China's money supply may also be used as indicators of monetary policy intermediary, in the long run monetary policy intermediary should be shifted to the inflation; and the financial supervision and financial innovation should always be made together and that cooperation on international regulatory should be strengthened to ensure the positive effects of financial innovation.