Bank Risk-taking Channel Of Monetary Policy Under Capital Account Liberalization

With the acceleration of economic globalization and financial globalization,in order to adapt to the change of the international economic situation and to promote economic transformation and financial reform in our country,Chinese authorities also accelerate the process of capital account liberalization.The 13th Five-Year Plan put forward that opening the financial market is one of the important reform areas in our country,and gradually realizing capital account liberalization to promote RMB internationalization is the focus of the reform in the future.But with the opening of capital account,the size and frequency of the cross-border capital flows are also growing,and the financial crisis with banks as the fuse broke out frequently,which prompted us to think about whether or not the bank will be affected by capital account liberalization and take on more risk?Under the condition of capital account liberalization,whether or not the monetary policy tools which are used to adjust and control the bank risks by monetary authorities will be also affected?According to the related literature research achievements at home and abroad,this paper adopts the method which combines theoretical analysis and empirical analysis s to conduct in-depth research for the relationship among capital account liberalization,bank risk-taking and monetary policy.At first,this paper analyzes the macroeconomic background,policy background and international background our country are facing to open capital account currently,and puts forward the research thought while combining the deficiencies of domestic and foreign research about the bank risk-taking channel of monetary policy and the impact of capital account liberalization on bank risk-taking wih the improvement put forward in this paper;Second,built on the theoretical framework of the impact of capital account liberalization on bank risk-taking,and use GMM estimation method to carry on the empirical test for the sample data of 50 commercial banks in China during 2005 and 2014;Again,refining and summarize the theoretical mechanism of the capital account liberalization affect on bank risk taking channel of monetary policy,and extend on the basis of the empirical models and empirical data in the second chapter,then verify the theoretical analysis.The main conclusions of this paper are as follows:1.The higher the degree of capital account liberalization is,the greater risk will bank take,and the "international risk-taking channel" exists in our commercial bank system;2.Capital account liberalization will indeed impact the bank risk-taking channel of monetary policy,that is to say that the improvement of capital account openness will enhance the promotion of loose monetary policy to bank risk-taking,and will weaken the inhibition of tight monetary policy on bank risk-taking;3.There exists different degree effect of capital account liberalization on the influence of different types of monetary policy tools on bank risk-taking,and quantitative monetary policy tools are more sensitive to capital account liberalization.Based on the above conclusions,this paper put forward two suggestions including:1.gradually open capital account in China,and strengthen the supervision of financial system risk;2.strengthen the collocation and coordination between different policy tools to form resultant force between different functional departments and to realize the flexible adjustment and control of bank risk-taking.