Study On The Difference Of The Financial Structure And Effect Of Monetary Policy Between Eastern Area And Western Area

The monetary policy is one of most important macroeconomic policies. Formulating and implementing monetary policies as well as regulating and controlling the national economy are the Central Bank's main functions. As one of the most important indirect means, the monetary policy plays an important part in our country's national macroeconomic regulation and control system. Since the reform and open policy been adopted, our country has adopted the regional non-balanced economic development strategy, as a result, the developed eastern area and developing western area, which have great discrepancies in economic development and financial development. At the same time, the regional financial discrepancy is unceasingly expanding. No matter in financial total quantity or in financial structure, the western area greatly falls behind the eastern area. The regional financial structure's difference will cause different responses to the same monetary polices between two areas, and will cause the regional different effects of the monetary policy.This article selected the tight monetary policy period, from September, 2003 to March, 2007. After conducting the practical study on the monetary policy effects in eastern area and western area, we can draw the conclusion as bellows: The western area is more sensitive to the tighten monetary policy, while the effect of monetary policy is less deep in the western area and the effect's duration is longer. On the contrary, the eastern area is more insensitive to the tight monetary policy, the effect of monetary policy is deeper and the effect's duration is shorter. Based on the view of the financial structure discrepancies, the reasons of different responses to the same monetary policy are including:①The western area's total financial quantity is few and the capital supplies is in sufficiency.②The western area's financial organization structure is unitary, the state-owned Commercial bank proportion is oversized, and other financial organizations proportion is too small.③The western area financial market system is less developed, the capital market's dynamics is too small.④The western area's financing structure relies on the loan of bank excessively and other financing channel is deficient. Therefore the effect of monetary policy in the eastern area, which owns a more multiplicative financing structure, is deeper but less durable.This article give the suggestions as bellows:①Perfecting the western area financial organization structure, including developing kinds of small financial organization and speeding up the development of the western area securities business, the insurance business and the trust rent industry.②Strengthening the western area money market's construction and consummation.③Implementing the different monetary policy tools in the eastern area and the western area, including different regional bank rate policy, different regional rate of deposit preparation policy and different rediscount policy.④enhancing the status of the western regional Central Bank Branch's in policy's regulation and function.⑤Optimizing the external environment of monetary policy's transmission in the western area.