The Study On The Effect Of The Development Scale Of China’s Bank-financing Products On Monetary Policy Transmission Mechanism

The concept of bank financial products was firstly put forward by the Bank of China for purpose of increasing the number of foreign exchange business customers.However,with the sustainable economic development of China,bank financial products have become an important way for the financial industry like banks,securities and insurances to develop their own business.Currently,the development of China’s financial market still lags behind and the reform of interest rate liberalization has just started.Besides,banks,securities an dinsurances are all managed and supervised separately and such financial environment has improved the development of financial products to some extent.However,the development of financial products has changed the financial market environment,thereby influencing the effective operation of the conduction mechanism of monetary policy.Especially,some financial instruments have not received effective financial regulation,which exerts certain Impacts on the effective implementation of monetary policy.As a result,the efficient operation of market is disturbed to a gr-eat extent.Through analyzing the effects of bank Financial products development on China’s conduction mechanism of monetary policy,the Connection between them will be found out an-d relevant policy advices will be obtained,which has certain effects on the efficient implementation of monetary policy.Firstly,the paper introduces the development history of bank financial products,divides it into three stages;elaborates the credit generation mechanism of bank financial products,analyzes the changes that it brought to the market;and makes a theoretical analysis on China’s monetary policy transmission mechanism,in which,we highlight Chinese monetary policy transmission mechanism.Secondly,the paper analyzes the impacts of bank financial products on monetary policy transmission body and channel,obtains the theoretical analysis of the impacts of bank financial products on monetary policy transmission.Finally,it combines empirical analysis,establishes models,draws conclusions and proposes specific policy advices for the development of standardized bank financial products.Based on the paper’s theoretical and empirical analyses,we draw the following conclusions:bank financial products indeed exert impact on China’s monetary policy transmission.The impact is mainly achieved through credit mechanism,bank financial products support real economy in a way which is very similar to bank credit,this is the main reason why bank financial product is called shadow banking.However,the path that bank financial product uses monetary mechanism to affect real economy and monetary policy is not clear.