Research On Relation Of Assets Price And Of The Bank Credit Scale

In recent years, with the developing of capital markets，asset prices fluctuateincreasingly. Modern economic and financial theory has recognized the correlationbetween the asset price volatility and financial system stable operation. The same time, thesharp fluctuations of the U.S. real estate prices led to the outbreak of the U.S. subprimemortgage crisis, and then into a global financial crisis. And this crisis led to a seriousimpact on the world’s financial system and the overall economic environment. In this crisis,the expansion of bank credit crunch and skyrocketing asset prices slumping is aphenomenon that can not be ignored. In recent years, China’s stock market and real estatemarket due to external and internal economic environment changes produce substantialfluctuations scale re-expansion of bank credit. Therefore, to maintain China’s securitiesmarket and stable development of the real estate market and the stability of the financialsystem, relationship study of asset prices and bank lending is crucial.In this paper, based on the analysis of asset prices and bank credit scale correlationtheory, I selected the monthly data of2002-2012in China, which is based on the stockmarket and real estate market. Then I used Dieter Gerdesmeier Hans-Eggert Reimers andBarbara Roffia, assetsprice formula to calculate asset prices. Through the study of therelationship between asset prices and credit scale, we found that the impact of the creditscale of asset prices in short-term and long-term impact is different. Asset prices in theshort term, one-way positive impact on the size of bank credit; while in the long term, thesize of bank credit on asset prices has a positive feedback mechanism. China’s stockmarket and real estate market has different characteristics. So government should makedifferent laws to operate the two markets and make appropriate policy recommendations.As for the stock market, the relevant departments should vigorously strengthenconstantly optimize and improve the market structure, strengthen the supervision of thestock market and pay attention to guiding the investor’s investment philosophy. China’s realestate market, government departments can start from these two aspects of the real estateindustry and real estate credit structure. In addition, we must vigorously strengthen bankcredit management and credit risk control, and gradually improve the monetary policytransmission mechanism, and further improve China’s financial system.