Finacial Frictions,Bank's Maturity Mismatch And Macroeconomic Credit Policy

Credit policy is one of most important macroeconomic policies in our country,it used to have obvious administrative characteristic before financial crisis in 2008,however based on the experience of the international response to the crisis,it has become a good macro-prudential policy instrument for central bank to deal with the global financial crisis after 2008.It can weaken the financial sector pro-cyclical behavior amplification effect of macroeconomic fluctuations,reduce the financial systemic risk,and increase the financial stability.China's GDP growth began to decline since the financial crisis,the current economy enters a 'new normal' state,there are two obvious characteristics,one is that after the slow down of GDP growth from high speed,to steady economic growth,the government implement a positive fiscal policy,and the other one is the government dominated the four trillion investment plan after the financial crisis in our country,the plan significantly increased maturity mismatch in bank sector.The current financial system is in the developing stage in our country,the banking sector is the important financial intermediaries in our country,its maturity mismatch characteristics will seriously affect the effect of fiscal policy.Absorbing the characteristic of the Chinese financial system,considering the credit policy in China Unicom with the particularity of fiscal policy and macro-prudential tools,this paper established a DSGE models include banking sector and the government sector,the maturity mismatch is introduced in the banking sector,and the macro-prudential counter-cyclical credit policy is introduced in the government sector,and the monetary policy as well as fiscal policy are introduced as external shocks into the model,the paper mainly analysis three problems,first,the effect of credit policy as a macro-prudential policy tools,second the interaction mechanism between the credit policy as a macro-prudential policy tools and monetary policy,thirdly,how the maturity mismatch will change the effect of monetary policy and fiscal policy based on the macro-prudential policy framework.The simulation results show that:1.compared with the model without credit policy,the fluctuation of economy and variables in bank sector is smaller,the result illustrate that the implementation of the credit policy has a very good macro prudential role,in reducing the pro-cyclical behavior of the banking sector for amplification of macroeconomic fluctuations.2.the implementation of macro-prudential policy represented by credit policy has negative effect of monetary policy,thus the cooperation of macro-prudential policy and the monetary policy can not only improve the effect of regulation on macroeconomics but also it can also improve the banking sector's balance sheet,reduce financial systemic risk,increase the financial stability.3.there are two different distinction in the influence of the financial maturity mismatch characteristic for the macro policy;there is a slightly effect of the maturity mismatch to the monetary policy's effect on macroeconomic regulatory,there is a significant effect of the maturity mismatch to the monetary policy's effect on the financial sector's balance sheet;there is a significant effect of the maturity mismatch to the government expenditures represented by credit policy on macroeconomic regulatory.The paper propose policy suggestions according to the simulation result.