Impact Of The Financial Supervision On Monetary Policy Transmission In China

In the modern market economy, monetary policy is the most important policy instrument to adjust the macro-financial and economic operation. When the expansion or contraction of the monetary policy can pass through the financial system to the real economy effectively, the expected goal for the national economy can be achieved. Having many deficiencies China's financial system is still in the stage of development. To clean the monetary policy transmission channels, so that the monetary policy transmission mechanism could be perfected.Firstly, this paper outlines the theoretical research of scholars at home and abroad on monetary policy and financial supervision for many years. Then it shows that China's monetary policy transmission and the present situation of the financial supervision. Secondly, this paper analyzes the role of interest rates in monetary policy transmission, the interest rate sensitivity of related subjects, and the effectiveness of interest rate policy on different transmission channels. This paper points out that the financial regulatory impacts on the interest rates playing a role in monetary policy transmission. In this paper, the correlation tests, regression models and so on are used to investigate the interest rate elasticity of the investment, deposits and loans, asset prices, in order to verify the correctness of the above theory.At last, the influence of interest rates has been boosted by decisions to allow lending and deposit rates to move more freely around benchmark rates. Only a modest deregulation, the role of interest rates has been moderate in pursuing the objective of monetary policy "to maintain stability of the value of the currency and thereby promote economic growth".