Research On The Effectiveness Of Innovative Monetary Policy Tools In China

In recent years,China’s economic development has entered a new normal,with the domestic macroeconomic and financial situation changes,China’s foreign exchange growth continued slow down,the development of Internet banking and financial disintermediation will affect the credit methods and financial intermediaries of bank financial institutions,structural imbalance in the liquidity of the market,"Three rural" and small and micro enterprises financing expensive and financing difficulties,the complicated and changeable economic and financial environment put forward new requirements and challenges to the regulation of monetary policy in our country.In this situation,since 2013,China’s central bank launched standing lending facility(SLF),short-term liquidity operations(SLO),medium-term lending facility(MLF),Directional reduction of Reserve monetary policy and pledged supplementary lending(PSL)as a new monetary policy tools.These innovative monetary policy tools have not been launched for a long time,and few studies,to study it is of great significance to understand the inherent characteristics of China’s monetary policy tools,grasp the changing trend of China’s monetary policy tools,and improve the regulation effect of China’s monetary policy.In this paper,standing lending facility,short-term liquidity operations,medium-term lending facility,Directional reduction of Reserve monetary policy and pledged supplementary lending as the research object,from its background,mechanism,effect and deficiency of the comprehensive analysis of China’s innovative monetary policy tools,based on the theoretical basis,innovative monetary policy tools of monetary policy transmission theory and on the analysis of the present situation,select the monthly incremental of standing lending facility,medium-term lending facility,pledged supplementary lending and the broad money supply increment,one-year Shanghai interbank weighted average interest rate used by constructing the vector autoregressive model(VAR),through cointegration test,error correction,impulse response and variance decomposition analysis,verification of innovative tools of monetary policy changes can cause the money supply and interest rates to illustrate the effectiveness of the innovation monetary policy tools.The empirical results show that China’s innovative monetary policy tools are effective.Innovative monetary policy tools will make on the increase of money supply in the market,reduce long-term interest rates,increase the availability of credit,pledged supplementary lending the greatest impact on the money supply,Standing lending facility has the greatest impact on interest rates,the effect of standing lending facility on interest rates is swift and strong,consistent with the intention of the central bank to try to build the operating tools under the "interest rate corridor" mode of standing lending facility.Through the decomposition of variance,we can find that the innovative monetary policy tools play a greater role than the interest rate on the money supply,which shows that the interest rate transmission channel of the innovative monetary policy tools needs to be strengthened.Finally,in this paper based on the theoretical and empirical analysis of the dual implementation according to the conclusion,innovative tools of monetary policy,the central bank raised the need to strengthen the management of expectations,to establish financing guarantee system and expanding the types and quantities of collateral and pledged good,gradually change the regulation mode and build "interest rate corridor" mode,look forward to the innovation of monetary policy tools play a greater role in the regulation of monetary policy in china.