Money Market Of The Monetary Policy Transmission Mechanism Study

Above all, the paper comments on the major theories of monetary transmission mechanism, summarizing them as four transmission approaches. Then it reviews the research status and main views of China's financial theoretical groups.Secondly, the paper analyzes the status quo of our transmission mechanism, especially pointing out the main problems existing in the money market transmission mechanism from the main bodies, which are mainly showed off by the following four aspects. The first one is that the effect of central bank's open market policy and deposit reserved policy aren't as imagined. The second one is that the transmission effect of money market interest rate to monetary policy is weak. The third one is that the increasing difference between credit and deposit makes monetary transmission mechanism retardant. The last one is that the response of enterprise investment and residents consumption to the change of interest rate is indistinctive.Thirdly, the paper analyzes the reasons that cause the low effect of our monetary transmission mechanism through monetary market. Those are the insufficiency of money market's development, the unfinished reform of financial institutions, the faultiness of enterprise mechanism and the juvenility of residents' consumption.At last, on the basis of analyzing the impact of new financial development on our monetary transmission mechanism through money market, the paper puts forward the countermeasures to change the low-level efficiency, especially about the choices of the monetary policy tools, operating targets, intermediate targets and ultimate targets. Then the author combines experiences of building money market from domain and overseas, giving some suggestions to the construction of China's money market and other participations, which are accelerating the reform of the interest rate's liberalization, developing money market, and standardizing the behavior of other participations.