A Research On Financial Disintermediation Effects Of Monetary Policy Transmission Mechanism

In recent years, with the deepening of China's financial reform and development, the financial system has changed quickly, and the capital market has developed so fast. As a result, financial disintermediation phenomenon is emerging in China gradually, which leads to big changes of the conduction basis of monetary policy, especially the monetary policy transmission mechanism composed mainly by bank credit channels.Based on the traditional theory of monetary policy transmission mechanism, the main research is focused on how the financial disintermediation affects the monetary policy transmission mechanism in the new period of China. Firstly, I use theories-induction method to summarize the monetary policy transmission mechanism theory of western developed countries, and conclude that monetary policy generally transmits through rate channels, bank credit channels, asset prices and exchange channels. Secondly, I shall analyze the reasons, performance and features of the financial disintermediation, and based on our previous monetary policy transmission mechanism, analysis is put on how the financial disintermediation effects monetary policy transmission mechanism. In this passage, I put forward this idea that financial disintermediation weakens the transmission efficiency of our country's monetary policy, this is because financial disintermediation weakens the most important role of bank credit channel in the monetary policy transmission mechanism, but enhanced the interest rate and asset prices channels. In the empirical part of this passage, through the unit root test, Johansen co-integration test, impulse response functions and variance decomposition I succeed in verifying the theoretical conclusions. According to the theoretical and empirical analysis results, I conclude that the financial disintermediation proposes higher demand on further development of direct financing market, interest rate marketization and the adjustment of intermediate target for monetary policy. Finally, this paper brings forward five suggestions on policy from different aspects which are improving efficiency of the monetary policy transmission mechanism; better playing of the role of the interest rate channel; Strengthening effect of asset prices channel; examining the rationality of intermediate target for monetary policy; strengthening the financial regulators coordination and cooperation.