| Since 2010, with the high inflation, the case of excess liquidity, China raised the legal deposit reserve ratio for nine times, the frequency is very high. Whether the legal deposit reserve policy is "ax", the adjustment of "small amplitude, high frequency" is reasonable, and its effectiveness, this is indeed worthy of business problems. So this policy and its effects are need to be deeply and comprehensively studied in china.The legal deposit reserve system originated in England in the 18th century, it is accompanied by the banking industry has produced. At the beginning, it was to meet the needs of bank payment and settlement, with the constant development, now it has become the central bank credit regulations, and important policy tool to control monetary circulation flow. Although it remains legal deposit reserve system, but the United states, Japan and other large economies is no longer use it as a monetary policy tools, the legal deposit reserve level is also very low. But in England which country carry out inflation targets, the legal deposit reserve system has been abandoned, the reserve of bank is just for the funds' settlement. For this, the reason are mainly due to the continuous development of financial innovation; and the elimination of money supply, which is the intermediate target of monetary policy; as well as the regulation and risk management functions of the legal deposit reserve ratio are diminishing.But in China, because the interest rates are non-market and the intermediate target of monetary policy is money supply, so, as a monetary policy tool of quantity type, the legal deposit reserve ratio is an effective tool to adjust the money supply. In addition, our long-term exist mainly by the high liquidity surplus of foreign exchange, the central bank is passively the basis of the currency, receiving more in social normal demand. Now in China, further credits and open market operations in terms of liquidity in the hedge have no much initiative, but the legal deposit reserve ratio is a low-cost tool. Further, on the passive unload large quantities of monetary base, the legal deposit reserve policy is not "ax", it just take the excess liquidity of the market, has no major shocks to the market and commercial banks, so it is a more mild monetary policy. So the legal deposit reserve system is an important role in long-term in China's monetary policy.By the analysis to the different period of the adjustment of the legal deposit reserve ratio in China, in the cases of overheated economy, inflation and excess liquidity, the effect of the legal deposit reserve policy is mild. But, the excess hedge effect of the legal deposit reserve policy of " High frequency, small amplitude" is very significant, it can effectively inhibit the monetary credit and the cost is lower. In the period of economic contraction, the effect of the legal deposits reserve policy is very large, for the release of mobility, the money supply pressure is very remarkable. Overall, the legal deposit reserve policy has played an important role in hedging the excess liquidity, regulating the credit funds, and controlling the money supply. The legal deposit reserve policy is a mild and effective monetary policy.Although the legal deposit reserve system is in constant development, it has contributed greatly to the stable and rapid development in economy of our country, but there are still some problems affecting the effectiveness of its policy to play. In order to perfect the legal deposit reserve system, we can reform the provision method of the reserve, adopt the average daily balance method and the contemporaneous reserve requirements; perfect the differential reserve system, and increase its levels and types, strengthen the information disclosure; cancel the interest reserve system, strengthen financial institutions' management to the excessive deposit reserve; further promote the process of commercialization, improve the policy effects of interest rates; and reform the system of exchange, settlement and sales in time. |
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