Research On The Effectiveness Of China's Double Pillar Regulation Framework Under The Condition Of Shadow Banking

The global financial crisis has hit major financial markets and exposed the fragility of the financial system.The crisis prompted academics and the financial community to pay more attention to systemic financial risks and began to assess the limitations of micro-prudential management.Macro-prudence has also received increasing attention from policy authorities.Preventing systemic risks has become the core issue of ruling the financial system.After the long-term practice of macrocontrol,we proposes a dual-pillar regulation framework of “monetary policy and macro-prudential policy”.Monetary policy target at stabilizing overall prices and promotes economic growth,Which is the management of the macro economy and its corresponding totals.Macro-prudential policies focus on financial stability,which can cope with the financial mechanism directly and then handle the systematic risks bringing by cross-market and cross-cycle in the meantime.The coordination of monetary policy and macro-prudential policy has more beneficial to achieve the goals of "price stability,economic growth and financial stability".The two-pillar regulation framework enables the central bank to combine the dual functions of price and financial stability.It recognizes the intrinsic relevance,target trade-off and coordination mechanism of monetary policy and macro-prudential policy,studies the effectiveness of the combination of monetary policy and macroprudential policy.It is of great significance to play the role of price stability and financial stability in the dual-pillar regulatory framework.Maintaining financial stability is one of the important objectives of the twopillar regulation framework.Preventing systemic risks is the main goal.Scholars believe that China's systemic risks include real estate,local debt,and shadow banking.Real estate and local debt have long been the focus of academic circles.Researchers Pay full attention to the impact of shadow banking on financial stability and the dual-pillar regulatory framework.With the deepening of financial innovation,shadow banking has become one of the birthplaces and media of systemic risks.The influence of China's shadow banking cannot be underestimated,so shadow banking must be considered as an important factor in the analysis and formulation of policies.This paper analyzes the coordination role and effectiveness of monetary policy and macro-prudential policy in achieving financial stability,constructs a dynamic stochastic general equilibrium model including shadow banking and dual-pillar policies.Empirical analysis shows that macro-prudential policy tools can mitigate the impact of the financial sector and special sectors on the macro economy.The combination of macro-prudential tools and monetary policy tools can enhance social welfare.The dual-pillar policy reduces output and credit volatility and stabilizes inflation.The effects of monetary policy have not been weakened,The existence of macro-prudential policies will reduce the impact of shadow banking on monetary policy,and the size of shadow banking has a positive correlation with interest rate regulation.