The Effect Of The Expansion Of Interbank Business On Monetary Policy Transmission

This paper comprehensively uses the method of normative analysis and empirical analysis to research the effect of the expansion of interbank business on the bank lending channel of monetary policy transmission.In the aspect of normative analysis,this paper gives a description of the concept,classification and development of the interbank business.Then this paper analyzes the reasons for the rapid expansion in recent years.In the aspect of empirical analysis,this paper first examines the existence of credit channel of monetary policy transmission in China using monthly economic data from 1998 to 2015.Then this paper collects a set of panel data of 61 commercial banks from 2007 to 2015.The GMM regression method is used to test the effect of interbank business on the bank lending channel of monetary policy transmission.Finally,this paper draws the conclusion and puts forward several corresponding policy suggestions.This paper comes to the following conclusions:1.The credit channel of monetary policy transmission mechanism exits and is effective in China.2.The interbank business of China’s commercial banks has been developing rapidly for some years,mainly due to changes in the market environment,increasing competition pressure and the opportunities of regulatory arbitrage.3.The development of interbank business can improve the increase of its lending scale.One of the reasons is that interbank business has less capital occupation,the other reason is that interbank business can increase the scale of loanable funds.4.The development of commercial banks’ interbank business will weaken the effect of monetary policy in the bank lending channel,which mainly arises from the loose regulatory standards for interbank business.5.The weakening effects of interbank business on monetary policy transmission show some differences among different types of banks.The effect of local commercial banks on bank lending channel is the most significant,followed by joint-equity commercial banks and state-owned commercial banks are the least significant.