Research On The Liquidity Management Of Commercial Banks In China

In the process of transition from direct control to indirect control of China’smonetary policy, monetary policy tools in adjusting liquidity of the banking system hasplayed an active and effective role. Today with the accelerating process of marketizationof interest rates and the impact of the un-eliminated financial crisis, the liquidity ofChinese banking system shows the larger fluctuation. Therefore, how to improve theeffectiveness of monetary policy instruments operate, thus effectively regulating andmanaging the level of liquidity of the banking system has become a priority.Based on the relevant research results and the principle of monetary policy operationand liquidity-related theory, this paper focuses on the impact and approach of monetarypolicy on the liquidity of commercial banks. Then this paper analyzes the currentsituation of monetary policy operations and the level of liquidity of commercial bankthrough qualitative and quantitative research and demonstrates the effect of monetarypolicy tools on commercial banks liquidity by constructing VAR model. And the modelobtains that the impact of monetary policy tools on excess reserves will be greater thanthat of the impact of loan to deposit ratio, and different monetary policy tools have thedifferent effect of duration and intensity on the liquidity of the banks. Finally, thisarticle puts forward advices to promote China’s commercial banks’ liquidity fromperspectives of monetary policy operations. The advices mainly include threeaspects: one is to improve and perfect the monetary policy operation tools andmethods; one is to improve the operational target system of monetary policy; and one isto develop and perfect the financial market and related subjects.In this paper, the innovation is studying the liquidity management of commercialbanks from the point of monetary policy operation, obtaining that monetary policyoperation influences the liquidity of commercial banks through the reserve changes, theinterest rate channel, foreign exchange channels and business credit supply. And thepaper puts forward the measures of promoting banks’ liquidity management from theperspective of improving the monetary policy operation tools and intermediategoals and related hardware and software construction.