A Study On The Impact Of Macroprudential Policy Tools On China’s Financial Stability

After 2008,financial regulators around the world have been looking at ways to detect financial stability and policy tools to enhance it.At present,regulators around the world uniformly believe that strong macro-prudential supervision is the most important measure to deal with financial systemic risks and can effectively maintain financial stability.China’s economic development has also entered a new stage,with various deepening reform measures being introduced,and the financial sector,as an important part of China’s economic sector,is also deepening its reform.China needs to actively prevent and control financial systemic risks and use macro-prudential policy tools to enhance the financial stability of China.This paper firstly summarizes the concepts of macroprudential policy tools and financial stability;secondly,financial stability is used as the explanatory variable,but there is no ready quantitative data,so it is necessary to construct the financial stability index first,this paper selects 13 indicators such as non-performing loan rate from three aspects,including financial institutions,financial market and domestic economy,as the basic indicators for constructing the financial stability index,and adopts principal component analysis,entropy value method and coefficient of variation method to construct three financial stability indices,and combined with the real situation of China,the financial stability index calculated by the coefficient of variation method is screened to measure the financial stability of China;again,the fitting analysis based on the determined time series graph of the financial stability index and the real situation of China finds that from 2013 to 2014,the financial stability of China is improving rapidly,and in 2015 the financial stability decreases slightly and falls to the level of 2013 in the middle of 2015,and from 2015 to 2019,the level of financial stability in China tends to be stable.From 2020 to 2021,China’s financial stability declines slightly in early 2020 because of the impact of the new crown epidemic,and financial stability is gradually restored after the epidemic is under control.Then,this paper selects macroprudential policy tools as explanatory variables and divides macroprudential policy tools into three categories:capital category contains capital adequacy ratio and provision coverage ratio,liquidity category contains liquidity coverage ratio and deposit reserve ratio,and asset-liability category contains loan-to-value ratio ceiling;finally,an empirical test is conducted using TVP-VAR model to study the time impact of macroprudential policy tools on financial stability Based on the impulse response plot analysis,it is found that in the short run,the provision coverage ratio,liquidity coverage ratio and deposit reserve ratio have positive effects on financial stability,while the capital adequacy ratio and loan-to-value ratio ceiling have negative effects.In the medium and long term,capital adequacy ratio,liquidity coverage ratio,and reserve requirement ratio have positive effects on financial stability,while loan-to-value ratio is negative and provision coverage ratio has no significant effect.