The Effect Of Financial Innovation On Our Country's Monetary Policy And The Countermeasure

General speaking, financial innovation refers to the new things which through the internal reorganization and the creative change of the various elements within the financial sector. Since the beginning in the 1960's, through nearly 50 years'development, financial innovation has become a global trend of financial development. In order to meet the needs the requirements of the development of financial and economic, every country made a series financial innovation, and has formed a certain scale of financial innovation system.However, when the financial innovation was making promotion on international financial and economic development, at the same time, it also had a certain impact on other aspects out of financial sector. The appearance and development of new institution, new tools and the new markets, provided a powerful driving force for the financial development of countries, but it also make challenges to the national macro-control, in particular to the implementation and control of monetary policy. Financial innovation reduces the measure nature, controllable nature of monetary policy intermediary agent target, and the correlativity with its ultimate target, weaken the implemental effect of required reserves rates and retrocession policy, and it also impact the normal operation on the transmission mechanism of monetary policy. As the most important and effective macro-control policies of a country, in order to adapt to the situation of the development in financial innovation, countries have made adjustment against the impact of financial innovation, to make sure more effective to play its role of regulation and control.Since reform and opening up, our country closely follow the trend of the world's financial development, begin to make a series of financial innovation, and have formed a system of a certain size on both kind and scale. In recent years, with the development of financial innovation, the impact on our country's monetary policy has become increasingly evident. In order to play a more effective role of monetary policy, based on the practice of our country's financial innovation, our central bank may improve the intermediary target, tools and transmission mechanism of our monetary policy.