| The subprime mortgage crisis in 2007 meant that the monetary policy rules of a single inflation target system were insufficient to maintain financial stability,and the micro-prudential supervision that urged the stable operation of individual financial institutions could not guarantee the general operation of the entire financial system.Therefore,it was necessary to introduce macro-prudential policies to manage the stability of the financial system.Up to now,although the legal subject of the macro-prudential policy is not necessarily the central bank,in practice,the central banks of most countries actually assume the responsibility of macro-prudential.As the two-pillar policy was formally written into the report of the 19th National Congress of the Communist Party of China in 2017,it means that the People's Bank of China will play a more important role in financial stability.So,how should we understand the relationship between monetary policy and macro-prudential policy in dealing with financial stability?Under the premise that the two policies are not completely independent,how to coordinate monetary policy and macro-prudential policy to achieve the goal of financial stability?The analysis and answers to the above questions are conducive to theoretical support for the accurate formulation and implementation of the two major policies of the Central Bank of China to achieve financial stability.This article first sorts out the literature on monetary policy and financial stability,macro-prudential policy and financial stability,and two-pillar policy coordination,and finds that the relevant research focuses on three aspects:whether monetary policy should assume financial stability responsibilities,how macro-prudential policy influences financial stability and how to coordinate monetary policy and macro-prudential policy.Although these issues have not yet reached a consensus,scholars have formed a basic consensus that the central bank needs to expand the multi-tool system that adapts to multiple objectives.Among them,the lending convenience monetary policy tool created based on the central bank's last lender function is a successful attempt to expand the multi-tool system,but the research on the theoretical transmission mechanism of lending convenience tools affecting financial stability is still blank.This paper introduces an endogenous liquidity demand mechanism between liquidity shortage banks(due to banks)and liquidity surplus banks(due from banks),and constructs a DSGE model that includes the inter-bank market.Conductive effects have been studied theoretically and empirically.Studies have shown that lending facilities can influence bank financing availability through interest rate guidance and liquidity effects,thereby reducing the negative impact of financial risks on the macro economy.In nature,lending facilities are tools of monetary policy operation in financial crisis management.If you want to prevent financial systemic risks in advance,you need to rely on macro-prudential policy tools.Next,this article systematically sorts out the macroprudential policy tools of various countries based on the IMF's macroprudential policy survey report and studies the effectiveness of macroprudential policies.The study found that macro-prudential policy tools help to restrain the growth of bank credit during the economic upturn,but the impact on the credit growth of non-bank financial institutions is not obvious,indicating that the macro-prudential policy tools that have been implemented are mainly commercial banks,not non-bank financial institutions,which makes it possible for cross-sectoral regulatory arbitrage.Considering that the original intention of the design of the macro-prudential policy is to fill in the supervision gap caused by separate supervision through cross-sector supervision,and to monitor the potential systemic financial risks,the tool system of the macro-prudential policy should also be expanded to non-bank financial institutions accordingly.Therefore,this article expands the existing narrow macro-prudential policy research framework only for commercial banks,and analyzes the effects of broad macro-prudential policies.The study found that the narrow counter-cyclical regulatory policy has a limited degree of reduction in regulatory arbitrage,while the broad counter-cyclical regulatory policy can not only limit regulatory arbitrage,but also inhibit investment volatility,meaning that the broad counter-cyclical regulatory policy combined with the shadow banking risk characteristics is more effective,which provides a reference for expanding the macro-prudential policy tool system.Finally,under the background that the monetary authority and the macro-prudential authority belong to different internal institutions of the People 's Bank of China,how to coordinate the two types of policies is worthy of in-depth study.Since monetary policy and macro-prudential policy are not completely independent,monetary policy will have an impact on variables such as bank credit and asset prices that are related to financial stability.Macro-prudential policies will also have an impact on macroeconomic variables such as output and inflation.This makes it possible for the monetary authority and the macro-prudential authority to adopt a cooperative game.But on the other hand,the cost of coordination and communication among various departments is relatively high.It is easy to influence the independence of departmental decision-making by jointly formulating policy rules,and if financial stability is one of the factors of monetary policy decision-making,the problem of multi-objective trade-offs still cannot be avoided.Considered this,Nash game may be a more practical way.In order to study how to coordinate monetary policy and macro-prudential policy,this article embeds these two types of game methods in the DSGE model that includes shadow banking.The study found that the specific coordination and cooperation model between monetary authorities and macro-prudential authorities should be based on the type of innovation,instrument variables and economic dynamic characteristics.Generally speaking,in order to achieve the goal of financial stability,the central bank needs to build a multi-tool system that adapts to multiple objectives.In terms of monetary policy,in addition to focusing on the role of lend facilities in anti-crisis and structural adjustment,in the future,we can also consider innovating monetary policy tools or promoting the transformation of monetary policy framework to achieve financial stability goals.In terms of macro-prudential policy,it should be based on cross-sector supervision,pay attention to the internal relevance of financial institutions,and expand the corresponding tool system.Finally,the primary duty of monetary policy is to maintain price stability and achieve economic growth.The primary purpose of macro-prudential policy is to achieve financial stability.The goal of coordination between monetary policy and macro-prudential policy is to prevent excessive risk-taking by financial institutions and suppress potential asset price bubbles.Both should focus on their own policy responsibilities and try not to hedge the effect of another policy as much as possible. |
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