Financial Innovation Effect And Our Country's Monetary Policy Improving

Monetary policy was used as a very important instrument in making the stability of currency and improving the macro economy, however, since 1980's, with the development of financial innovation, the effect of monetary policy has weakened. Therefore how to avoid the adverse effect of financial innovation and make monetary policy play better has become an important study in economic area.Financial innovation is the innovation of finance business, finance framework of organization and finance system, and it has an important effect on monetary policy. Financial innovation reduce the measure nature, controllable nature and correlativity of monetary policy intermediary agent target, weaken the implemental effect of required reserves rates and retrocession policy. In order to deal with the challenge of financial innovation, the developed countries have transformed their monetary policy intermediary agent target, seldom used the required reserves rates and retrocession policy, but used the monetary policy operation and other new tools frequently.With the development of financial innovation, our country's monetary policy has transformed significantly, but it still can not adapts to the step of financial innovation, thus decrease the effect of monetary policy. Therefore, we should improve the monetary policy intermediary agent target, adopt the new tool of monetary policy, and dredge each monetary policy conduction channels.Perfect simultaneous now having a tool of monetary policy, and adopt the new tool of monetary policy. Dredge each monetary policy conduction channels, including credit, interest rate, assets price and exchange rate channel, improves conduction efficiency, and strengthens monetary policy validity.