The Coordination Of Monetary Policy And Financial Supervision From The Perspective Of Liquidity Transmission

After the financial crisis,the situation for macro liquidity control and micro liq-uidity supervision are both changed.On the one hand,because shadow banking and other financial innovations have changed the traditional theory of monetary policy,the macro liquidity control is difficult to achieve the expected objective.On the other hand,The international financial supervision organization has formulated a more stringent fi-nancial supervision standard represented by Basel III.It has formally incorporated liq-uidity supervision into the regulatory system and also has become a double constraint with capital supervision.The distortion behavior of the financial institutions in mon-etary conduction which are facing new regulatory requirements of liquidity still need to be researched.Therefore,it is necessary to build an analysis framework based on liquidity conduction,which is used to analyze the coordination mechanism between monetary policy and financial supervision with financial innovation.The paper first classifies the liquidity according to different connotations and con-structs a liquidity measurement system incorporating the shadow banking system so as to analyze the interaction among different levels of liquidity.Then based on the above definition and measurement of liquidity,we analyzed the fresh rule of the interrela-tionship between macro and micro liquidity in the background of financial innovation and build a new liquidity conduction mechanism based on the expansion and extension of the traditional monetary policy transmission channels and mechanism.Based on an-nual statistics covering 16 public banks during 2007 to 2016,the project analyzed the function mechanism of financial institutions and the distortion effect of financial super-vision in liquidity conduction.Then we verified the heterogeneous behavior between traditional banking and shadow banking using panel VAR model,the substitution effect of the shadow banking alternative to traditional banks and the asymmetric performance of the traditional banks facing the double constrains of capital and liquidity in the loose and tight liquidity environment.The research findings verified that financial regula-tions can impose an effect on the transmission channel of monetary policies.However,this effect is clearly influenced by the existence of shadow bankings.The coordination between monetary policies and financial supervision is required to be improved.