The Study On Credit Transmission Mechanism Of Monetary Policy Based On The Behavior Of Commercial Bank

There are two schools of the transmission mechanism theory of the monetary policy:the "money view" and the "credit view". From the major economic and financial crisis happened many times worldwide, the credit amount of banks always play important roles. Based on China’s economic and financial features as well as theoretical research achievements, it is judged initially that the credit channel is playing very significant role in the transmission of China’s monetary policy. In1998, the People’s Bank of China cancelled its direct control to credit size. Therefore in the background that the regulation measures have changed fundamentally and the bank industry is developing rapidly, it is necessary to further study the transmission mechanism theory of China’s monetary policy and the related problems. Then the relative policy suggestion can be put forward in order to improve the effectiveness of the monetary policy.As an important microeconomic entity of the credit transmission mechanism of the monetary policy, the credit decision-making behaviors of industrial banks are regulated and controlled by the monetary policy and banks. At the same time, they also influence the implementing effects of the monetary policy. According to the new style of the monetary economics study, we think about the heterology of the credit and divide the structure of credit period; these are seldom to be referred in the existed study. Therefore the angle of the structure analysis of the thesis has some theoretical breakthrough. Meanwhile, on the base of macro-analysis, the micro-behaviors of banks are contained in the thesis. The theoretical model of bank control is closer to the reality, and the bank competition norm has been added into the practical examination. All the measures make the proof process more comprehensive.The research of the thesis will be mainly developed from the process of the credit transmission mechanism theory of the monetary policy, from the ultimate target to the intermediate objective, to the operation tools. Firstly, we define the meaning of the credit transmission mechanism theory of the monetary policy, reviewed the "money view" and the "credit view" and comparatively analyze the related research achievements of some Chinese scholars on this field. Secondly, research the influences the credit amount period structure made on the economic entity. That is to say, when the loan has been divided into short term loan and long-term loan, through using a small size DSGE model, we can theoretically analyze the different effects made by the different period loans on the economic development and general prices standards, and also can examine the related views through FAVAR. Thirdly, through fixed parameter model and changeable state space equation, according to the quarterly data from1998to2010, examine the adjusting effect on credit supply and period structure made by every kind of monetary policy. Fourthly, on the base of the above macro-conclusion, we further unlock the black box of industrial bank, according to the theoretical model based on the profit maximum rule, analyze the impact on bank credit behaviors made by bank supervision, as well as the influence on the monetary policy, and also discuss the potential results of the New Basel Agreement. Fifthly, estimate the changes of China’s banking market structure since2003, based on the above theoretical model, to set up the regression model of the Panel data and test the influences on the credit behaviors made by banking supervision. The whole research process will offer the new structure angle to the analysis of China’s credit transmission mechanism theory of the monetary policy. Through the analysis of theoretical model and the examination of the practical data, the following results will be found:1. When analyze the influence on the macro-economy made by the credit from the angle of credit amount period structure, we find that although the short-term loan has short term promoting influence on economic development, it will stimulate inflation. The middle and long term loan will have long term promoting influence on economic development, and will restrain inflation meanwhile. Because the different credit amount in different periods has different structure, so the credit in different periods makes different impacts to the macro-economy.2. When monetary policy is supervising the credit scale, the quantitative tools ratio such as the legal deposit reserve rate and making the market business known to public are more effective than price tools such as the rate interest. In the future, through the improvement of the trade amount and the improvement of the operation measures, making the market business known to public may become the most important tool for the Central Bank to supervise the credit amount. At the same time, we think that the monetary policy tool can only make influence on the total credit amount; therefore it’s difficult to adjust the period structure of credit.3. Through the analysis of the theoretical model, we think that:(1)the high rate of bad loans, the Capital adequacy ratio restriction will make negative influence on the bank’s credit supple, and at the same time, will increase the middle and long-term loans’ ratio in the total loans.(2)The restriction of the loan to deposit ratio and legal deposit reserve ratio will lessen the loan supply, but will not make influence on the credit period structure. However, according to the data of2003to2010, because the supervision norm has reached the standard, the supervision of capital sufficient ratio and loan to deposit ratio hasn’t made restricted effect on the credit of banks. The influence of bank’s supervision on the bank’s credit decision-making will ultimately affect the implement effect of the monetary policy. The requirements of bad loan rates and capital sufficient ratio will expand "procylical" operation of banks. When the monetary policy is loose, the restriction of the loan to deposit ratio will probably control the credit expansion.On the base of the main structure of the thesis, we think that we should improve china’s existed monetary policy framework, and consider "credit view" as the theoretical guidance. We also should improve credit scale, the media objective, and pay great attention on the period structure of credit amount. In the operation of the monetary policy, the effect of banks’ supervision should be put into full account. Meanwhile, we should make stronger supervision and guidance to the commercial banking credit behaviors and adjust the credit structure. Then we should also lessen the "procylical" problem of a bank’s supervision regulation in order to improve the "inverse cycle" of the monetary policy.