The Diversification Of Financial Structure And The Transmission Efficiency Of Monetary Policy

The research between financial structure and the transmission of monetary policy is a dynamic perspective,which is associated with many research aspects of the financial economics. It not only relates to the central banks,commercial banks,financial market and other monetary policy variables,but also has a very important link with the government, enterprises, the public and the Department of foreign economic.What we call the "dynamic" means that a country’s financial structure,with the development of the domestic economic structure and economic development,is in constant development and change.The financial structure is the transmission media of national monetary policy.A country’s monetary policy must be through and depend on their financial structure to play its function of macro-control on the national economy and express its effect on the real economy,which is the transmission mechanism of monetary policy.Because of the dynamic changing of the financial structure, the state must take the actual situation as its roots as they formulate the monetary policy,adjust and innovate each stage target and tools of the monetary policy to correspond to the states of financial structure and economic.In this way,we can improve the integrating degree of them and finally improve the transmission efficiency of monetary policy.This paper just analyzes the transmission efficiency of monetary policy from the perspective of financial structure.Based on the current phenomenon of financial structure diversification in China,it analyzes our country’s transmission efficiency of monetary policy in theoretical and empirical methods. The transmission mechanism of monetary policy includes the credit channel and the interest rate channel from the traditional view.But with the diversification of financial structure and the widening and deepening of the financial market,there are some extra capital market channel and exchange rate channel.Because the effect of exchange rate channel is not obvious,in this paper, we will focus on the analysis of effect on the efficiency of the credit channel of monetary policy, interest rate channel and capital market channel by the diversification of financial structure of our country.On the basic of the summary of the general theories of the transmission mechanism of monetary policy,this paper plays from the factors affecting the efficiency of the credit channel, interest rate channel and capital market channel,have an overview of the status of these elements in China’s diversification of financial structure,and then expounds its impact on the efficiency of China’s monetary policy conduction theoretically.So we can have preliminary conclusions that China’s diversification of financial structure has a weakening effect on the efficiency of credit transmission of China’s monetary policy and has a strengthening effect on the efficiency of interest rate transmission and capital market transmission of our country’s monetary policy.In 2007,the central bank determined the Shibor as the benchmark interest rate of money market.So,in this paper,we take this year as a cut-off point and analyses respectively, using Eviews8 statistical tool,the efficiency of credit transmission,interest rate transmission and capital market transmission of China’s monetary policy empirically by collecting and processing relevant data from 1998 to 2006,2007 to 2015,selecting a financial structure indicator basing on the scale-the ratio of the bank size and market size to construct a linear regression model.Then,we have a comparative analysis to the metering results of two different period of time to verify the theoretical analysis results above.Credit channel regulation can also be called quantitative regulation,because it takes money supply as its core and control methods.And interest rate channel regulation can also be called price regulation,because it takes interest rate as its core and control methods.The conclusion of the study shows that the adjustment and control of our country’s monetary policy is still dominated by means of quantitative regulation,but,relatively,along with China’s widening and deepening pluralism of financial structure,the effect of China’s monetary policy’s quantitative regulation is gradually weakening.And with the continuous development and improvement of China’s financial market, the effect of China’s monetary policy’s price regulation is gradually strengthening.It can be seen that it is the necessary way of our economic development that our monetary policy’s quantity control coverts to price control.Therefore,in the foundation of theoretical and empirical analysis to the transmission efficiency of monetary policy in our country’s diversification of financial structure,this paper argue that our country should speed up the conversion of the monetary policy’s quantity regulation to the price regulation.All along,our country capital market has been in disadvantageous situations,like late beginning,small scale,imperfect system and so on,that the capital market transmission channel of our country monetary policy has the very small influence to the transmission efficiency of monetary policy.Therefore, its status in the transmission channels of monetary policy is low.China’s central bank only focus on the credit channel and interest rate channel in the choice of monetary policy channels,have less consideration of the capital market channel.But with the emergence of the phenomenon of our country’s diversification of financial structure,our country’s capital market is more developed,the integration between our monetary market and capital market is high,and the reflection of microscopic economic subject to the capital market changes is also sensitive.All these changes marks the rapid development of our country’s capital market channel.Therefore,in the context of the diversification of financial structure, the people’s Bank of China should pay more attention to China’s capital market channel,focus more on the development to improve the transmission efficiency of our country capital market of monetary policy,adapt and rationally use new factors in our country’s economic development.China’s central bank should make full use of the capital market channel’s power to support the traditional credit channel and interest rate channel and continue to expand and improve the development of the capital market channel.