Research On The Influence Of Monetary Policy Upon Chinese Commercial Banks' Profit

Commercial banks is very important in the process of monetary policy transmission.Usually,central bank adjusts and controls the macro economy through commercial banks,which are one of the most important channels on carrying out the monetary policy. Commercial banks also play an important role in the development of the economy. In the three principles of the commercial banks' operation, profit is the primary principle. However,when central government making monetary policy,it usually only pays attention to the macro economy,and ignores the profitability of Commercial bank which plays an important role in monetary policy transmission, scholars at home and abroad made a little study in this field,especially the empirical study on it. So,the study had an important significance in leading the central bank and Chinese commercial banks' behavior.Monetary policy and profit of Chinese commercial banks were considered as research objects of this study. First of all,the first model ,which was about how monetary policy affects Chinese commercial banks' profits,was setted up after constructing the commercial banks' profit model. then,base on the basic consensus of money supply would be impacted by valid monetary policy instruments ,the study established the second model. This study analysised monetary policy's influence on the profit of Chinese commercial banks based on eviews software, ADF test,Granger causality test, Error Correction model and Granger causality tests . In this study,Industrial & Commercial Bank of China and Shenzhen Development Bank were respectively adopted as large and small commercial bank's represents. The result found that neither the Rate of the Legal Deposit Reserves nor Money Supply could affect the profit of the banks,but the banks' profit changed when the interest rate was changed. In the end,the paper gave some policy suggestion to central bank and commercial banks.