Indirect Financing System Configuration Failure Mechanisms And Effects Analysis

By constructing an analytic framework including central bank, commercial bank and enterprise, the thesis makes a comprehensive analysis on the mechanism and effect of the inefficient allocation of China's indirect financing system.There are six chapters. The background of this study and the review of classical study are summarized in the first chapter. Chapter 2 studies central bank's monetary and credit policy. Chapter 3 studies the mechanism of credit allocation of commercial banks. Chapter 4 studies the relationship between state-owned bank and state-owned enterprise. In chapter 5, the macro effect of the inefficient allocation of indirect financing system is explored. Chapter 6 makes conclusions and some suggestions. We reach these conclusions through the study:Firstly, the direct planning mechanism of credit resource allocation exerted by central bank led to allocation inefficiency; while central bank abandoned direct control of credit, there also exists allocation inefficiency because of the exchange rate system, multifunction of central bank and so on.Secondly, the credit allocation of China's commercial banks is characterized by credit bias on SOEs and large firms, which deviates from the structure of real economy, results in the inefficient allocation of credit resource and also the dilemma of commercial banks.Thirdly, the soft budget constraint existing in state-owned banks and SOEs changes state-owned banks into institutions providing financial subsidy on behalf of government. Such function alienation of banks leads to accumulation of NPL of them.Fourthly, the macro effect of inefficient allocation of China's indirect financing system includes: the inefficient credit channel of monetary policy, the evolution of informal financial market, the crowding out effect of FDI and inadequacy of domestic demand.Fifthly, the improvement of allocation inefficiency of China's financing system depends on the reform of central bank, commercial bank and the improvement of financial ecological environment.