Relax Under The Financial Control Of The Effectiveness Of Monetary Policy

Since Edward Xiao and Ronald MacKinnon put forward the theory of deepenning of the finance, the relaxed finance is in charge of making for the trend of history.Each developing country and some developed countries carried on the relaxed finance correspondingly . The analysis with main article is the impact on monetary policy validity to the relaxed finance controls.The article first review relevant relaxed finance control theory,enumerate some argumentation on influence on currency control to relaxed finance controls,It expounds the influence from five aspects from the second part.Four aspects of all alse are the monetary policy conduction channels,namely interest rate channel,credit channel, capital channel and exchange rate channel. The interest rate channel is the foundation that other channels function . Second part Analyses interest rate channel mainly, first makes an introduction of the interest rate channel, then analyses the result of the interest rate policy in recent years of our country,draws the conclusion that the interest rate channel is twisted and the policy result of interest rate weakens. Then analysed the essential condition that the interest rate channel should function.These conditions are :the independence interest rate policy, unblocked interest rate channel , sensitive relevant subjects to interest rate ,interest rate has 3 characteristics as intermediary goal:relevance ,controllability ,measurability.The conditions are indispensable,finally analyzes how relaxed finance control impact these conditionsThe third part analyses the channel of credit division mainly, analyses the cause of credit division.Then analyses after relaxed finance control ,credit division that upper limit leads to disappear, but credit division that the information asymmetry causes still exists.This kind of credit division causes the validity of the monetary policy to reduce.The fourth part analyses the channel of capital market , analyses what is capital market conduction of monetary policy, then analyses how the relaxed finance controls impact capital market, finally draw that the changes of capital market have both sides on monetary policy validity.The fifth part mainly analyses the channel of exchange rate conduction ,under open economy the economy of a country is influenced by other countries more and more, triangular model of Mondale proves monetary policy independent character , fixed exchange rate system , freedom of capital flows can't coexist concurrently .The article proves after relaxed finance control ,the floating exchange rate system will strengthen the validity of the monetary policy,but monetary policy validity will face the test to the exchange of item of the capital.The sixth part analyses after relaxed finance controls.the system supply of the alternative policy tool increases.This strengthens the ability of currency controls.The thesis analyses the function by the example of consumption credit proportion.The conclusion indicates ,it is complicated that the relaxed finance controls impact monetary policy validity, both a favorable one and a unfavorable one.Strengthening monetary policy validity needs to overcome unfavorable aspects.Of course, the purpose is to guide practice. So, in the forth part we survey the financial deregulation reform in deferent countries, and try to get some guidance.After inspect the already changes in Chinese financial deregulation, we have enough reasons to argue that there have been significant changes in the whole financial system and environment, although we can see financial regulation here and there. This paper concludes that with the reform deepening and thoroughly opening, the monetary policy must advance with the time, establish new frame of monetary policy, according to the market development. Firstly, raise the position of the Central Bank furtherly, and avoid administrative intervention. Secondly,enhance the independence of monetary policy. Thirdly, quicken the pace of commercial bank reform and interest rate reform. Fourthly, cultivate financial market, and develop a standard market. Fifthly, adjust middle target flexibly.use suitable policy operation tools comprehensively. Finally, try to improvethe environment of monetary policy.