The Research On The Validity Of Bank Capital Channel Of Monetary Policy

The subprime mortgage crisis erupted in 2007 has made many financial institutions suffered severe losses, and the regulation failure is an important reason for this crisis. Since crisis broke out, the more demanding and more comprehensive regulatory framework have been determined. With capital regulation is taken more and more seriously, the bank capital channel theory, which is a new channel, is paid close attention to. Considering the banking industry in the important position in the financial system in our country, the research of bank capital channel in our country is very necessary.This article will consider monetary policy, bank capital adequacy ratio and bank credit decisions as the research object, through the analysis of the commercial bank capital regulation is how to affect bank credit decisions and monetary policy, and then detail the transmission of bank capital channel. While we analyze the difference between the bank capital channel of monetary policy and the traditional bank lending channel, which illustrates the bank capital channel is a new mechanism different from the lending channel.Based on the analysis of bank capital channel transmission mechanism, this article selects 14 listed commercial Banks in China from 2006 to 2014 micro data, by constructing dynamic panel model, using the generalized moment estimation method as regression analysis model. For the representation of a more effective monetary policy, based on the Taylor rule, we using the difference of the simulation value and real value to reflect the monetary policy of our country. And in order to further analysis in tight and expansionary monetary policy conducted by bank capital channel, this paper introduces a virtual variable, monetary policy stance variable, to further analysis.The empirical results show that, there is a significant positive correlation between the bank loan growth and bank capital channels proxy variable, which means bank capital channel exists in our country. And we find the capital adequacy ratio of Banks is higher, the sensitivity to the monetary policy is lower. In the study of the asymmetry of monetary policy, we find that in the process of bank capital channel transmission the tightening monetary policy transmission is more effective. In order to achieve the purpose of the implementation of monetary policy well, government should considere according to the size of the bank's capital adequacy ratio and the asymmetry of monetary policy itself in order to use differentiation of monetary policy tools and appropriate monetary policy to different Banks.