Is There Bank Lending Channel In China?

The current knowledge of the transmission mechanism of monetary policy can be divided into two categories:"monetary view"and"credit view". Economists have largely adopted a positive attitude toword to "monetary view", while for the "credit view" and the existence of credit channels, there is a considerable controversy, which is particularly prominent in our country. So to study the whether of the credit channel is exist in China is the main subject of this article.The content of this article can be divided into six parts.The first part is the introduction of this article. In this section, the author describes the research background and significance of this article, while this research method, structural arrangements and the conclusions and so are briefly discussed.The second part is the literature review of the bank lending channel. First, this paper pointed out that the theory of monetary policy transmission mechanism can be divided into two categories:"monetary view"and "credit view." After a brief introduction of the "money view",this paper focused on the credit channel which is emphasized by the "credit view".The credit channel theory can be divided into bank lending channel and broad credit channel,namely, "financial accelerator" mechanism. This paper studies the bank lending channel though the theoretical and empirical aspects.There are two methods used by empirical research of bank lending channel: testing by aggregate data;testing by non-aggregated data. Then this article pointed out that the former is replaced by later because of the"identification problem".The third part is on discussion of bank lending channel model. This model developes based on Kashyap, Stein (1994), Suo Yan-feng, Chen JM (2008). This model is a partial equilibrium model including portfolio behavior of the heterogeneity of banks. Finally, the model derived two inferences. The fourth part describes data used by this article.The source of the data is "Monthly Bulletin of Statistics of China" in which this article uses loans, deposits, securities investment and other variables. Whether these variable sequences contain some seasonality,so this article eliminates the seasonality using the method of X-11.Besides,this article takes logarithmic processing on these adjusted sequences in order to reduce the volatility of the variable sequences.The selection of indicators of monetary policy. This article uses the growth rate of M1 as a monetary policy measure,and further, this article studies the tight monetary policy effects on banks'portfolios.Part V is the empirical analysis of this article. This section contains three subsections.First of all,this article tests two prerequisites of existence of bank lending channels. The empirical results show that these two conditions in our country is established.Secondly,this article began to study the impact on bank portfolio caused by tighten monetary policy,using two measurement methods:impulse response analysis; regression estimate analysis. For impulse response analysis, this article constructes a VAR model which includes loans, securities investment, real GDP and the monetary policy indicators GM1_According to P. Kishan and Timothy P. Opiela (2000), this article has established a quantitative model to estimate the impact of monetary policy on different banks' loans and securities portfolio.Part VI receives the following conclusions,according to the theoretical analysis and empirical research.First,The two prerequisites, which ensure the existence of bank lending channel, can be well satisfied in our country.Second,From the impulse response analysis and regression estimate analysis,this article receives the result that tight monetary policy has more power on joint-stock banks'loan than non-joint-stock banks'loan. Therefore,the positive analysis confirmes the inference one,and provides supporting evidence for the view that the bank lending channel exists in our country. Third,We can not get the evidence to support our inference 2. However, based on the realities of China's banking industry, we have also given a reasonable explanation.Indeed, the same time, this study also exist certain limitations and shortcomings, primarily manifested in the data.This article has three contributions.First, This article presents a survey of the theory of bank lending channel based on a great deal of literatures.Second,this article uses the non-aggregated bank credit data of China for research, thus avoiding the "identification problem".Third,this article uses two kinds of measurement methods for research,thus ensuring the robustness of the conclusions.