A Study On The Regional Effect Of Monetary Policy Based On The Risk - Bearing Channel

Monetary policy is an important kind of macroeconomic adjustment measure which plays a big role in economic development. Central bank regulates economy basing on the state of national economy by monetary policy. This way has been carried out by central bank of China since 1983. However, regional development in China is unbalance and different. Moreover, the differences between religions are expanding. Then, it appears different regional economic and financial structure which leads to different effect of monetary policy. Many scholars agree with the view that transmission channel of monetary policy is the main reason for regional effect of monetary policy. Compares with traditional transmission channels, such as interest rate channel, credit channel and so on, risk-taking channel has been concerned by many scholars and supervision department since 2008. Risk-taking channel focuses on independent risk-taking actions of commercial banks and pays attention to the link between monetary policy and financial stability. And Risk preference of commercial banks has effect on credit allocations in different regions and different industry. Central bank of China has begun to adjust economy by non-traditional monetary policy frequently since 2014. However, thanks to risk preference of commercial banks, the effect of targeted easing policy has decreased, which has a big challenge to China monetary policy. Therefore, it is necessary to analyze regional effect of monetary policy basing on risk-taking channel.This essay theoretically and empirically verifies the existence of regional effect basing on risk-taking channel. First of all, it analyzes the mechanism of how commercial banks’risk-taking influences regional economic development and builds the action equations of commercial banks and final production department. Then it puts forward the hypothesis. Secondly, considering spatial spillover effect of regional economic development, it proves the hypothesis by constructing Spatial Dubin Model. The results show that risk-taking levels of commercial banks have positive effect on regional economic growth and the effect is determined by large enterprises" output and local government intervention. What’s more, the effect is the most significant in east distinct. According these results, central bank of China should pay more attention to risk-taking level of commercial banks when it formulates and executes monetary policy. And concerning regional effect of monetary policy, central bank of China can harden the operation of monetary policy regionalization.