The Characters Of Commercial Banks And Efficiency Of Monetary Policy In The Transition Economy

China is in the transition period and the reform is a progress step by step. Theparticular transition requires particular monetary policy. We try to study somecharacters of commercial bank and the efficiency of monetary policy in transitioneconomy. Credit channel is the main channel of conduction mechanism of monetary polices.The quantity and structure is the key problem of the monetary policy. And thecharacters of commercial bank have much impact on the policy. We analyze therelationship between the performance of banks and the efficiency of monetary policy.The non-performing loans and deposit balance have some direct impact on the policy. Then we discuss the credit rationing mechanism and credit concentration in China.They all affect the effectiveness and its intensity of the monetary policy. And weanalyze the economies of scale and scope in the Chinese commercial bank industriesusing some empirical tests from 1995-2001. We found that the Chinese commercialbank have potential to expand their business to improve the efficiencies andproductivities. In the other hand the expansion of the business will have interesteffects and substitution effects on the monetary policy. We should take account thesefactors when we formulate the policy. And we study the characters of commercial bank and the efficiency of monetarypolicy from a macro-perspective. We use the SCP method to describe the relationshipof market structure and efficiency of policy. Chinese banking system is a monopolymarket and this is not very good to the implementation of our monetary policy. Thenwe discuss the characters of commercial bank under the development of capitalmarket using Bordo-Jeanne Model. We believe we should pay more attention to thecredit action during the monetary policy formulation even under a highly developedcapital market. Finally we discuss the monetary policy and banking regulation. They have a veryclose relationship. We use Poole Model to analyze the targets of our monetary policyand we bring forward some suggestions about the reform of Chinese monetary policyand the coordination mechanism of the monetary policy and banking regulation.