| While the loan scale management has canceled in1998, open market operation is used to control the liquidity of commercial bank and the money supply of market by our central bank, and it has become the main daily monetary management tools. In recent years, under the influence of the global financial crisis, the Chinese banking system liquidity show the large fluctuation. It is important to regulate and control the level of liquidity, reduce some obstacles in China’s monetary policy transmission mechanism and improve the effectiveness of monetary policy.Firstly, on the basis of summarizing correlative literature and the open market operation theory, this paper theoretically analyzes the mechanism of the effect of open market operation on the liquidity of commercial bank.Secondly, the paper has made a qualitative and quantitative research, focusing on the current situation of the development of the open market operation and the liquidity of commercial bank. In addition, papers used statistical data of2004-2011, to demonstrate that open market operation have long-term equilibrium and short-term dynamic effect upon the loan-to-deposit ratio for Chinese banks and excess deposit reserve ratio by building VAR model. Through using cointegration test, Granger causality test and impulse response function and other methods, we analyzed the relationship between the variables. The result showed that the open market operation has significant impact on the loan-to-deposit ratio and excess deposit reserve ratio and money-market interest rate. At the same time, we have come to the conclusion that this impact has a time-delay.Finally, based on the analysis of the above, some policy suggestions are brought forward from the current situation of open market operation and money market, and obstructions on the transmission process of the open market operation. |
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