Effectiveness Analysis Of Financial Disintermediation On China’s Monetary Policy Transmission Mechanism In The Post-Crisis Era

Financial disintermediation originated in the1960s, the foreign theory of disintermediation is mature, but China cannot copy the foreign experience. According to China’s financial market development level, our country’s financial disintermediation is bank disintermediation, and it is the disintermediation of bank’s loan business. Inadequate supervision is the important reason for the subprime crisis, the financial supervision will be more strict in the post-crisis era, the shadow banking system that is produced in avoiding regulation is a hot topic in recent years, it is also the latest manifestation of disintermediation in our country. In this paper, disintermediation of the definition, measurement and empirical studies include the content of the shadow banking system.Compared with developed countries, the financial market of our country is not abundant and mature, before the subprime crisis, our country’s disintermediation is mainly refers to the equity financing and bond financing. But in the post-crisis era, the definition and causes of the financial disintermediation have some great changes because of the shadow banking system’s developping. Reseaching of the financial disintermediation helps us to meet the new situation of financial disintermediation, and also helps to improve the theory of financial disintermediation, so this article research has theoretical significance.Financial disintermediation cause huge challenge to the traditional operation of commercial Banks, Researching of the financial disintermediation is helpful to our commercial bank’s transformation strategy. The shadow banking system as the latest form of financial disintermediation, its scale is expanding gradually, and it is a kind of financial system which is lack of regulation, studying the new situation of financial disintermediation help regulators to establish effective regulatory policy. The main monetary policy instruments is quantitative in China, the emergence of financial disintermediation will affect the policy conduction effect inevitably, researching of the financial disintermediation helps the central bank to make the monetary policy correctly, and to improve the effectiveness of monetary policy. Above all, this article has practical guiding significance.The theoretical part of this paper starting from the definition of our country’s financial disintermediation, in theory, analysising the financial disintermediation effect on monetary policy transmission channels qualitatively. Financial disintermediation promoted the two trends:the interest rate marketization and diversification, and the monetary policy transmission mechanism has two core channels, interest rates and bank credit, the marketization of interest rate is the reform of interest rate system, the diversification is a challenge to the status of bank credit asset. Financial disintermediation affects the transmission mechanism inevitably reflected in the influence that the two trends to the two core channels. The theoretical results of this paper is that the financial disintermediation promoted the interest rate channel and weakened the credit channel.Then, this paper described the status of our country’s finance disintermediation of the post-crisis era, and based on that, discussed the measurement problem of our country’s financial disintermediation. Our country’s finance disintermediation in the post-crisis era have these performance:the scale of traditional finance disintermediation growed slowly, the scale of the shadow banking growed rapidly and the Internet of financial lifting wave of technology disintermediation,. Based on the analysis of the situation and experience of domestic and foreign financial disintermediation measure, this article constructed metrics of financial disintermediation which include the scale of the shadow banking system.The empirical part of this article established two vector autoregressive (VAR) model. First VAR model have these endogenous variables:financial disintermediation index, the broad money supply,gross domestic product, loan balances,interest rates. The second VAR model includes all variables other than the financial disintermediation index, all variables are monthly data for2009-2013. Through compared the two figure of the impulse response, the author analyzed the influence of financial disintermediation to the interest rate channel and the bank lending channel; the author established variance decomposition to the model of contains financial disintermediation index, and comparied the GDP contribution of interest rate channel and bank lending channel. Empirical conclusion is that the financial disintermediation promoted the interest rate channel and weakened credit channel, and the contribution to GDP of interest rate channel is more than the contribution to GDP of bank lending channel.At last, on the basis of the combination of theory and empirical conclusion, this paper gives policy Suggestions that further perfect interest rate channel, dredge conduction effect of exchange rate channels and standardize the shadow banking system.The innovations of this article:(1) This article joined the shadow Banks in the index of financial disintermediation scale, further improve the financial disintermediation index;(2) In the VAR model,this article studies the interest rate channel and credit channel at the same time, and carry on the comparative analysis of both. Because my ability is limited, there are still some deficiencies in this paper:(1) As the data of the insurance company pay scale and investment property at insurance company is difficult to obtain and relatively small, this article have not joined it to the statistical scope of financial disintermediation indicators, such will inevitably affect comprehensive of this indicator.(2) The empirical analysis of this paper studied two paths, the interest rate channel and bank lending channel. On the one hand, the interest rate channel and bank loan channel are the most representative channels, asset price channel, the channels of exchange rate and balance sheet channel are the compensation and extension to the interest rate channel and bank lending channel; On the other hand, because the financial disintermediation have small influence on other channels and it’s difficult to quantitative analysis, other channels don’t mentioned detailed, that will inevitably make the research conclusion lacking of comprehensive.