| This paper begins with theoretical review, which introduces three types of transmission mechanisms of monetary policy and their respective way of action. This introduction focuses on the credit transmission channel. Taking into account three assumptions of the credit channel, this paper analyzes the necessary conditions of the credit channel in China. Although the way of financing funds for companies in China has changed greatly, banks still dominate the indirect finance system, which is the main way for companies to raising funds. In addition, for the financial institutions the use of funds and the sources of funds both are relatively simple, ordinary residents deposit rates has not been released, the market-oriented reform of the interest rate is at a crucial stage. There are a lot of factors which can affect the effectiveness of banking credit channel, industry factors is the one.Based on the above theoretical and practical analysis, the paper selects a sample, which contains 60 commercial banks in the year 2002-2012.The unbalanced panel data in ten years is used to study the loans of all industries, industrial loans and real estate loans,which are used to explore the factors affecting the loans.The empirical part based on the Michael Ehrmann (2001) function of bank loans will capture the loans response for changes in monetary policy and changes in the industry’ own credit demand. The results show that industry factors can affect the allocation of funds between industries in a certain level. For the industry itself, different industries have different credit demand, which is displayed in the model where the production and price of different industries are different. That is, different industries have different credit cycle. For the impacts of monetary policy on the industry loans, there are also significant differences between industries. In addition, the paper can verify the existence of the credit transmission channel in China by observing the microscopic characteristics of banks with cross-term monetary policy proxy variables. Meanwhile, the paper can find that the the heterogeneous reaction of monetary policy depends only on the size of the bank’s characteristics.Finally, some relevant policies are recommended based on the study of this article, including: further improving credit transmission channel, implementing different money policies to different industries, focus on coordination of monetary policy and other policies. |
