Monetary Policy And Commercial Bank Risk-Taking

The global financial crisis in 2008 caused a great turmoil in the global economy,as well as the attention of many scholars at home and abroad on the correlation between monetary policy and financial market stability.Borio & Zhu(2008)proposed a risk-taking channel for monetary policy transmission,noting that expansionary monetary policy can not only directly affect the credit scale of banks,but also stimulates credit tolerance by stimulating the risk tolerance of financial institutions and ultimately affects the macroeconomic stability.As an important bridge connecting macro regulation and the real economy,commercial banks’ responses to policies are related to the transmission effect of macro interventions,and their risk-taking behavior is also an important factor affecting economic stability.Therefore,it is of great significance to explore the relationship between monetary policy regulation and the risk-taking behavior of commercial banks.At the same time,since the 1990 s,the concept of monetary policy implementation has undergone important changes.The expected guidance and management have become one of the elements of the policy framework of central banks in various countries.However,at present,few domestic studies have focused on the impact of central bank communication--the new type of monetary policy tool,on the risk-taking channel of monetary policy and even the stability of the entire financial system.In this context,this article incorporates the central bank’s verbal communication into the monetary policy framework,and explores the impact of the central bank’s monetary policy on commercial banks’ risk exposure by constructing the central bank’s verbal communication index and actual action index.This article first summed up the relevant literature at home and abroad and the mechanism that monetary policy affects the bank’s risk-taking.Among them,the feedback effect of the central bank provides inspiration for the research in this article.At the same time,the author has also paid attention to several factors that may affect the risk-taking channels of banks,and put forward the research hypothesis of the article.Subsequently,this study used the quarterly data of listed banks to empirically test the hypothesis.The results of the study show that there is a channel of bank risk exposure through monetary policy in China.The risk-taking behavior of banks is also affected by the new monetary policy tool.At the same time,the article also found that the credibility of the monetary authority will also have an impact on the effectiveness of monetary policy.When the central bank’s words and actions are inconsistent,the role of monetary policy is not significant.Finally,the size of the bank ’s assets weakens the sensitivity of risk-taking behavior to monetary policy.The reason for this phenomenon is that banks with large assets have a strong correlation with other entities in the system,and risks will spread quickly once they occur,and are therefore subject to stricter supervision.At the same time,the frequency of the central bank’s verbal communication will also affect the risk-taking of commercial banks.Based on the above conclusions,the policy recommendations of this paper include: To further improve the framework for monetary policy formulation,when adjusting monetary policy,attention should be paid to the actual actions of the central bank and the impact of central bank communication on the risk orientation of financial institutions and thus the impact on financial stability.At the same time,pay attention to the coordination of central bank communication and actual actions,flexibly use the two and timely detect the market feedback effect.In addition,the macro-control of monetary policy and the supervision mechanism coordinated to follow up to maintain the stability of the financial system.Finally,monetary authorities should also pay attention to the use of communication times.