The Present Stage Of Excess Monetary Liquidity Reasons, And Its Governance

In this article excess liquidity is defined as money supply excesses the financial market liquidity need of a stable and healthy economy in the same period.After a research on the liquidity of current state(from 2003 to now) by M2/GDP and foreign exchange reserve,the author finds out that the value of our M2/GDP far excesses that of USA and Japan of the same period.Our foreign exchange reserve increases greatly after 2003, excess liquidity caused by the release of base currency for the purpose of absorbing foreign exchange reserve drives the increase of real estate price and stock bubble.Excess liquidity has an impact on the real economy in terms of slowing down the efficiency of capital investment,it has a direct impact on the long term harmonious development of the state economy, and therefore it's urgent to find a solution for excess liquidity.The first chapter of this article makes a charter analysis on the current status of state excess liquidity with economy analysis data from recent years.In the second chapter,the author makes an intense analysis on the cause of excess liquidity from three aspects domestic, international and international capital liquidity,the multiple objectives of the money policy(employment,economic development, inflation and international income balance) makes external balance very difficult to realize.Meanwhile the increasing foreign exchange reserve will further intensify domestic excess liquidity.The author also points out that status of the finance system decides the bearing ability of state excess liquidity,the flow of the international capital speeds up the proliferation of excess liquidity across the world.In the third chapter, the author studies the impact of excess liquidity with an emphasis on the impact on banking system,economy market and real economy,and analyzes on the relations between excess liquidity and inflation.The fourth chapter talks about the resolutions for excess liquidity.By using International Monetary Analysis method and Mundell-Fleming model, combining IS-LM-BP frame and NS-NX frame,the author analyzes the relations of trade account of the impact of domestic spending and money effect and the savings investment gap,proposes some actions such as RMB devaluation and finance policy designation,and works out some measures to resolve excess liquidity from the points of money policy and finance policy.