The Application And Effect Analysis Of China's Central Bank's Liquidity Management

As the policymaker and implementer of monetary policy,the central bank shoulders the mission of financial macro control and takes the role of lender of last resort.This natural position determines that the central bank has an unshirkable responsibility for liquidity management.It is an important aspect of the success of the central bank's monetary policy to maintain the reasonable,appropriate and sufficient liquidity of the country,promote the balance of supply and demand,and maintain the stability of the financial market.From the subprime mortgage crisis in 2008 to the present,China's central bank has experienced several tests in liquidity management,and has accumulated rich experience and achieved certain results.In 2008,China's central bank in response to the financial crisis on the "four trillion" liquidity,in a short period of time to stimulate the economy,but in the long run,resulting in local debt accumulated bad loans,real estate bubble phenomenon;2003 money shortage phenomenon,excess supply of money but the stock market and banks are lack of funds.Today,China is in a new economic normal situation,the pace of economic growth from high-speed into middle and high speed,growth momentum from factor driven to service industry and innovation driven,the economic restructuring is imminent.China Marshall index(M2/GDP)in 2015 is 2 has a breakthrough,it also shows that the current Chinese monetary aggregate size,but the society still feel the shortage of funds,especially some Small and micro businesses and the "three rural" financing expensive financing problem,and some of the excess capacity of the enterprise funds,part of large state-owned enterprises such as the use of low rate,but still occupy a lot of resources,it requires the people's Bank of China adjustment before the "flood irrigation" like regulation of liquidity,liquidity into targeted delivery,2014-2015 Chinese people bank has conducted 'a total of 7 targeted RRR cuts and measures to encourage commercial banks to Small and micro businesses the "three rural",and infrastructure construction and other key areas of lending,to support the real economy,promote the rational development of economic structure.And the liquidity control tools of term structure and combinatorial optimization,the integrated use of the deposit reserve rate policy,open market operation policy,loan policy,medium-term lending facility(MLF),standing loan facilities(SLF),supplementary mortgage loans(PSL)liquidity adjustment tool,enrich the term structure of liquidity.To an important contribution to promoting the social cost of financing down up.The practice of liquidity management in China's central bank,while dredging the monetary transmission mechanism,improving the efficiency of financial operation and the ability to serve the real economy of financial services,also urgently requires the innovation of the central bank liquidity management theory.At present,China's economic performance presents a phased characteristics and new normal,and adapt to the new economy,the central bank liquidity control is also facing the old contradictions and new challenges.On the one hand,China is still in the emerging and transitional stage,soft constraints and structural contradictions are still more prominent,the currency of money enters the economy after the change,thus weakening the effect of monetary policy;on the other hand,with the rapid development of financial innovation and financial market,facing quantitative regulation challenges increased.The price regulation mechanism is not perfect,the monetary policy of both quantity and price balance and conversion difficulty rising.Therefore,in the environment of economic globalization,but also concerned about the effectiveness,forward-looking monetary liquidity management and use of tools,and the coordinated operation of the international financial system,which is the Central Bank of China must face an important issue and effective response to the.In this paper,qualitative and quantitative methods are used to analyze the liquidity management tools of central bank.The full text is divided into five parts,the first part of the introduction,leads to the background,significance,literature review,research methods and innovation deficiencies.The second part flow concept and measurement index are explained.The third part is about the connotation and Chinese liquidity management objectives and tools for further analysis,and details the liquidity management practice China in recent ten years.The fourth part uses the vector autoregressive model to empirically analyze the effect of liquidity management tools,so as to observe the effect of monetary policy tools used by central banks to control the liquidity of the currency.Finally,according to the empirical results,this paper puts forward some suggestions for the improvement of China's liquidity management.