The Research On The Effectiveness Of Macroprudential Policy And Coordination With Monetary Policy

The 2007-2009 financial crisis,owing to its unprecedented degree of damage to the economy and the impact on the financial regulatory system,was destined to be a milestone in the development of economy.Academic and financial circles had prompted us to reflect on the cause of the crisis in depth,who recognized that the regulation of the single financial institution as the core of microprudential supervision system was no longer to maintain the stability of the financial system.Theory of macroprudential and the policy practice of it had been concerned by the regulatory authorities of various countries.As the abundance of macroprudential regulation practice,the relevant macroprudential theory and empirical research need to be strengthened.Thus,the study of the effectiveness of macroprudential policy and its coordination with monetary policy can not only enrich the theory of prudential regulatory policy,but also provide a useful reference for China's macro-control and regulatory reform.The research route of this article resulted from a range of issues as follows: What is the effect of macroprudential policy on economic regulation;How to define macroprudential policy;What are its goals and tools and how to measure and classify them;How to explain that policy tools have different preference to financial stability goal;How to evaluate the effectiveness of macroprudential policy;How to deeply understand the conduction mechanism of these macroprudential policies;Whether to consider the coordination of macroprudential policy and monetary policy and how they coordinate;How to construct the macroprudential supervision system in china,etc.In order to solve the above problems,this paper firstly combed the basic theory on the effectiveness of macroprudential policy and related literature,including the financial friction theory,the financial fragility theory,and the theory on the effectiveness of macroprudential policy and policy coordination.Then,through the theoretical analysis,this article researched the effectiveness of macroprudential policy,including the objectives,tools,transmission mechanism and the effectiveness evaluation system of macroprudential policy.Thirdly,the fourth chapter focuses on the empirical research of macroprudential's effectiveness,taking "the brics" as an example and using the Qualitative Auto-regressive Model(Qual VAR)to respectively study the effectiveness of different types of policy instruments targeting on different policy goals under the loose or tight policy environment.Fourthly,based on the above work,this paper further studied the coordination of macroprudential and monetary policy.On the one hand,theoretically,this part studied the necessity,the mutual influence mechanism and the pattern of the coordination of macroprudential and monetary policy.On the other hand,quantitatively,from the view of bank credit and housing sector namely the supply and demand of credit,this part respectively studied the coordination of macroprudential policy and monetary policy targeting on the goal of credit by using the qualitative auto-regressive model and of housing prices by using the Dynamic Stochastic General Equilibrium(DSGE)method.Finally,through the study of the above problems,this paper put forward some suggestions on the practice of macroprudential policy in China.To sum up,on the basis of the integrated use of theoretical analysis,normative analysis,empirical analysis and other research methods,building a macroeconomic model by using the method of Qual VAR and DSGE,this paper studied the effectiveness of macroprudential and its coordination with monetary policy,and drawn conclusions and suggestions are as follows:Firstly,in terms of the policy effect,the credit and tax tools are more effective,and the liquidity and capital tools are less effective.The more often,continuous,time-lagging of the implementation,the more negative and less effective it will be.Because liquidity and capital instruments generally affect the financial stability objectives through the balance sheet of commercial banks,so they are delayed,easily affected by other policies and have a negative effect.However,the tax instruments and credit instruments mainly rely on administrative means to directly act on macro Prudential policy objectives,so they are often more direct and effective.Secondly,in terms of targeting goals,some policy tools have a certain bias,others are not obvious.Liquidity and tax instruments are more effective at targeting credit growth.Credit instruments are more effective in targeting the growth of housing prices.The capital instruments do not have obvious tendency.Thirdly,in terms of policy symmetry,macroprudential policy is asymmetric.The tightening macroprudential policy in the upside financial cycle performed better than the loose macropudential policy in the downward financial cycle.Macroprudential policy is supposed to stabilize the financial system.Similar to monetary policy,macroprudential tools performed very well when restraining the asset prices and the credit growth in upturn economic cycle,but weakly in downturn economic cycle.Fourthly,in the aspect of policy coordination effect,macroprudential policy tools have a certain helping role in the realization of monetary policy objectives.Especially when the market is subject to financial shocks,the helping effect is obvious.Under the impact of production technology shocks,interest rate shocks and real estate supply shocks,the welfare loss of Taylor rule is the smallest,and the policy effect is the most effective.When the targets of the macroprudential policy and monetary policy exist at the same time,the effectiveness of monetary policy tools may be weakened,and the effectiveness of macro Prudential policy tools may be strengthened.The reason lies in that the conduction path of two kinds of policies overlap,and monetary policy tools have spillover effects.In addition to targeting price level,the monetary policy also had a positive impact on the target of credit.However,the macroprudential policy tools are effective only when pegged to the credit target,thus weakening the effect of monetary policy and strengthening its own effect.Lastly,in terms of coordination rules,monetary policy instruments focus on price stability,while macroprudential policy tools focus on financial stability.In accordance with certain rules at the same time,the coordination effect of two policies will be better.Under the real estate demand shock,monetary policy with a standard Taylor rule to cooperate with macroprudential policy would minimize the welfare loss.Based on the above research conclusions,this paper further put forward policy suggestions as follows:Firstly,in the use of macroprudential policy tools,the policy-making authorities should pay attention to distinguish between policy tool orientations,choosing "specific target" or "no specific target" according to the actual situation.For example,when to curb the rapid rise of housing prices,the use of tightening credit tools should be given priority to.Secondly,to maintain financial stability objectives,policy authorities should use a combination of macroprudential policy tools to jointly prevent systemic risk.Thirdly,in the use of a variety of macroeconomic regulation and control policy,policy authorities should consider the coordination of them.The implementation of policy instruments should be based on some certain rules,and should be adapted to the macroeconomic and financial stability.Especially when the economy is in a downward interval,macroprudential policy should be in accordance with the "one policy one goal" principle only targeting financial stability,and it will be more effective when combined with monetary policy,fiscal policy and other means of regulations.Lastly,in the reform of financial regulatory system,we should try to build a macroprudential regulation system dominated by the central bank with joint supervision of a number of regulatory authorities.The central bank should be given full play in maintaining financial stability,and transform from the institutional supervision role to functional regulation role,or be more able to adapt to the modern development of the financial market supervision.Thus,it will be conducive to the promotion of full coverage of the supervision of financial system in China,and avoid regulatory duplication and omission.