Construction Of Interest Rate Control System And Monetary Policy Transmission

Firstly,we makes an in-depth analysis of the transmission of central bank policy interest rate to the money market interest rate;secondly,the influence of "liquidity effect" and"expectation effect" are discussed,as well as the transmission of exchange rate fluctuation and capital:flow through different stages and different monetary policy regulation.Lastly based on the bank supervision,we discusse the transmission of interest rate and quantitative monetary policy to China's bank risk-taking.Our research finds that:Firstly,the increase of the weighted rate based on the number of investments will leads to the rise of interest rate of money market.The influence of SLF and weight OMO interest rate to the money market rate is affected by the change of individual liquidity level of banks and the probability of reverse repurchase operation,and the influence of reverse repurchase rate to money market rate is close to 50%,SLF,influence is weak,but is rising quickly.The transmission of policy interest rate to DR001 is the most smoothest,which can be used as the target of central bank interest rate operation.Secondly,the continuous reduction of the reserve requirement ratio will lead to the rapid rise of the currency multiplier,and the flexible adjustment of the currency multiplier by the mortgage loan(such as MLF)can avoid the change of the currency multiplier;the"liquidity effect" of the market has declined while the "expected effect" has been rising;and the impact of capital flow on the exchange rate changes.The response to liquidity shocks is very unstable.The response to interest rate shocks is about 8%,and it keeps rising.The impact of interest rate changes on liquidity level and exchange rate keeps rising.Finally,from 2008 to 2016,China's banking supervision can effectively limit the liquidity creation of banks,and the impact on the table is more obvious.Quantitative easing monetary policy increases the liquidity creation of banks,while price-based easing monetary policy leads to a decline in the liquidity creation of banks on the table,but the liquidity creation outside the table rises.The regulation of fixed capital ratio(NSFR)can affect the level of liquidity creation of banks,and can play a counter-cyclical role in quantitative and price-based monetary policies.