A Study On Cross-border Capital Flow Management Measures And Its Combination Based On Macroeconomic Stability

After the collapse of the Bretton Woods system,the regional international financial crisis and the recent worldwide financial crisis show that cross-border capital flows are an important factor in exacerbating economic fluctuations in open economies,and the cross-border transmission of financial crisis induced by cross-border capital flow has become one of the typical characteristics of modern financial crisis.As new pattern of comprehensive opening up is set as the main goal in new era by China,the opening of the capital account and the financial industry have become important measures to further deepen the opening up of the economy.However,the cross-border capital fluctuation formed during the opening of the capital account has intensified,and this economic fluctuation and financial risk accumulation have become potential concerns in the future.In view of the lessons of previous international financial crises,strengthening the exchange rate policy and monetary policy regulation,improving the coordination effect of capital flow supervision policy and macro prudential policy have become the primary tasks for the regulatory authorities to deal with the potential risks of capital account opening.From the perspective of China’s existing policies to deal with cross-border capital flows,it includes both the traditional sterilized intervention policy to deal with the impact of money supply,and the capital flow management measure represented by Tobin tax repeatedly mentioned in the monetary policy report.Although the regulatory authorities are constantly strengthening the prevention of the harm of cross-border capital flows,our country is still in the primary stage of financial industry opening to the outside world,so it is an important issue to re-examine the traditional sterilized intervention policy,to formulate new regulatory policies,and to coordinate with other macroeconomic policies and macro prudential regulatory policies.In view of this,based on the reality of China’s capital account opening and cross-border capital flow volatility,this dissertation reviews the evolution of cross-border capital flow management measures and policies,discusses the optimal choice of monetary policy under different exchange rate control intensities and sterilized intervention mechanisms,analyzes the Tobin tax formulation and its coordination with exchange rate policy under cross-border capital flow through enterprises’ overseas financing channel,studies the impact of cross-border capital flow under the channel of commercial banks on financial risk transmission and economic volatility by constructing a dynamic stochastic general equilibrium model and from the perspective of economic stability,examines the effects of countercyclical macro prudential regulatory policies and interest-free deposit reserve policies,and proposes policy recommendations to prevent cross-border capital flows from affecting the domestic economy.The main conclusions of the research are as follows:1.The cross-border capital flow management measure is a non-discriminatory management tool for the currency rather than the foreign holder in terms of management means.The flexible use of some tools in the practice process makes it have a counter cyclical adjustment function and to a certain extent,it shows macro-prudent policy attributes.The market-oriented regulatory attributes of such management tools enhance their coordination with traditional macroeconomic policies,makes a variety of policies more coordinated,and is conducive to the combination and implementation of various policies.Many countries have achieved good results in implementing this policy.Overall,the policy broadens people’s toolbox for cross-border capital flow management,plays a role in easing cross-border capital flows,and can abandon the unfair characteristics of traditional capital controls and help maintain the reputation of the country’s financial markets.2.When cross-border capital flows increase domestic foreign exchange reserves and trigger the expansion of money supply,domestic economic fluctuations will intensify,and the sterilized intervention policy can reduce the fluctuation of money supply and play a good effect of slow release of economic fluctuations.As implementing the sterilized intervention policy,the effect of the quantitative monetary policy on mitigating the money supply and inflation volatility is more prominent.The price-based monetary policy will cause the interest rate to fluctuate greatly due to its policy attributes.By contrast,the policy effect of quantitative monetary policy tool in stabilizing the fluctuation of macroeconomic variables is more balanced;however,with the increase of exchange rate flexibility,the policy advantages of quantitative tools have gradually weakened,and the policy effect of price instruments to alleviate economic fluctuations has gradually improved.3.When cross-border capital flow increases the scale and risk of foreign debt of enterprises,the flexible exchange rate policy can alleviate the fluctuation of domestic economy.The cross-border capital flow management policy in the form of direct Tobin tax can reduce the proportion of capital flow and enterprise’s foreign debt,effectively alleviating the risk of enterprise’s foreign debt.The regulation effect of dynamic Tobin tax regulation system,which focuses on the proportion of foreign debt in total debt,is more significant,and its effect is positively related to the intensity of dynamic regulation.The combination policy of exchange rate policy and capital flow management measure is better than that of only one policy,which provides more policy options for regulatory authorities to deal with complex economic environment.Especially for low tolerance of exchange rate elasticity,the Tobin tax policy for capital flow can be introduced to mitigate the impact of capital flow on domestic economy and debt risk.4.When the commercial banking system becomes an important channel for cross-border capital flows,capital flows will transfer the financial risks of large countries to small countries and exacerbate the pro-cyclical characteristics of the international financial system.The counter cyclical capital buffer policy for commercial banks effectively reduces the risk-taking level of domestic commercial banks,and reduces the fluctuations of capital market and macroeconomics,but has limited effect on restraining capital flow.The capital flow management tool represented by interest free deposit reserve can alleviate cross-border capital flow,but its effect on mitigating commercial banks’ risk-taking and economic fluctuation is relatively weak.The combination of these two types of policies can complement each other,and the regulatory authorities can achieve the optimal policy combination according to their own regulatory needs.The research of this dissertation expands and deepens the theoretical research of using the capital flow management measures to mitigate the fluctuation of cross-border capital flow and its impact on macroeconomics,deepens the research of monetary policy choice under the sterilized intervention policy from the perspective of economic stability,enriches the research on the combination effect of Tobin tax policy and exchange rate policy,and expands the regulatory policy research of cross-border risk transmission of commercial banks under the open economy,which not only provides a theoretical support for the setting policy of preventing the impact of exogenous shocks on the domestic macroeconomics,but also provides a useful reference for the coordination of the central bank’s policy tools.