Analysis Of The Influence Of Modern Central Bank Payments System On Money Supply

Safe and efficient central bank payment systems can conduct monetary policy more smoothly, promote capital flowing rapider, make financial market interworking more tightly, improve the efficiency of capital allocation More Efficiently, especially prevent financial risk better. In recent years, payment patters have experienced great transformation when faced the application of information technology and network economy. Electronic payment instruments replaced banknote gradually. Monopoly issue of central bank money became a question with the rapid progress of the payment and settlement systems. Also it became difficult to know the aggregate of central bank money.This paper research the impact of modern payment mechanism on monetary policy aiming at aggregate intermediate target. After summarizing experiences of market economy countries including the United States and Euro area, this text make all-round reviews in the development of payment systems and monetary Policy in China. This paper will use literature research method, case analysis method and data analysis method to understand central bank payment systems better.This paper makes several conclusions. With the rapid progress of the payment and settlement systems, monetary multiplier is magnified. The ability of Money creation in financial system is being strengthened because commercial banks fall over themselves for balance sheet expansion. The mechanism of influence of deposit reserve on financial institutions is changing when facing the progress of the payment systems. Liquidity constriction happens in financial system when Real Time Gross Settlement System is employed. Challenges for the aggregate intermediate target of monetary policy rose with the rapid progress of the payment and settlement systems. Finally, the paper puts forward suggestions to deal with monetary policy pressure brought by the development of the payment systems in China.