The Analysis On The Impact Of Risk-taking Of Commer-Cial Bank On The Effect Of Monetary Policy In China

With the gradual deepening of the economic-financial system reform and theconstant improvement of the financial system in China, monetary policy has become animportant means of government Macroeconomic regulation and control.As independentoperating individuals of risk-taking, because the operating behavior of commercial banksplays the important role of allocation of social funds, commercial banks take importanteffect on the effect of monetary policy.Excessive expansion of the size of credit which iscaused by the long-term easing of monetary policy is the reason of U.S. subprime mortg-age crisis, and the crisis quickly evolved into a financial crisis sweeping the globe, whichmakes the community started to pay attention to the commercial bank’s risk-takingbehavior in the implementation of monetary policy.Basel Ш reached in2010pays more attention to the risks of commercial banks. Indetail, it clears commercial bank risk-taking mechanism of monetary policy variables andthe conduction process, makes the monetary policy transmission channels unobstructed,accurate knowledge of the policy trends of the intermediate target and enhances theefficiency of monetary policy. All of the above make stable and sustainable developmentof social and economic vital theoretical and practical significance. So scientificallyanalyzing and measuring the influence of risk of commercial banks to monetary policyeffects and enhancing the efficiency of monetary policy Is the inevitable requirement ofimproving the level of national life and achieving the harmonious development of society.First, on the basis of research related to risk-taking of Commercial Bank and theeffect of monetary policy, this paper defines the connotation of the commercial bank risk,and sorts out the theories of the effects of monetary policy. After that, this paper analyzesthe mechanism of the effects of commercial bank’s risk-taking to monetary policy inaspects of both bank credit conduction channel and intermediary objectives of monetarypolicy. Besides, this paper chooses suitable variables and sample to test the above resultsthrough time series model. Finally, this paper makes conclusion of theoretical andempirical analysis, and tries to give advices on how to improve monetary policies’ effects. The article first defines the meaning of the commercial bank’s risk-taking, discri-minates similar concept, at the same time clarifies the theory of monetary policy andintroduces the analysis technologies and methodologies of the paper.Then, from the credit transmission channels of monetary policy, and the effecti-veness of intermediate target, analyze the mechanism how does the commercial bank’srisks-taking effect the monetary policy. During the analysis of the impact on credittransmission process of monetary policy, on the basis of the theory of the possibility thatrisks-taking affects the credit supply, pull the risk variables into theoretical models of theCC-LM to be extended to analyze the risk-taking’s effect in the conduction process of thebank credit. Commercial bank risk-taking analysis of the effectiveness to monetary policyintermediate target the money supply equation, analyzes from the money supplymechanism;from market interest rates for testability, controllability, controllability andother point of view, the risk intermediary indicators of the effectiveness of market interestrates.Secondly, the reasonable construction of the indicators of risk-taking of commercialbanks, and select a proxy variable for bank credit transmission channel; through theestablishment of the cointegration equation between the variables, inspection long-termeffects of the relationship between risks-taking and bank credit conduction variables;creating error correction model and the pulseresponse function, testing exposuresto changes in the relationship between short-term bank credit.Furthermore, representatives of all levels of money supply and the inter-bank offer-ed rate for the two monetary policy intermediate target variable, namely the establishme-nt of the cointegration equation, the error correction model and impulse response functionto measure the long and short-term impact effect on the intermediate target variable thatcaused by risks-taking, and combined with the mentioned conclusions above to analyzethe test results. The results said the commercial bank risks-taking to the perturbationeffect on the money supply is greater than the impact of market interest rates.Finally, considering the theoretical analysis and empirical test results, thoughtaccording to the banking system structure, the money market system, the social creditsystem and other aspects of monetary policy, the proposed rationalization of suggestionsto strengthen the monetary policy effect on the stability of the banking risk commitment. The possible innovations of the paper are as follows:1. This paper sets risk-taking as a variable in CC-LM model and thereby analyzesthe effects of risk-taking in the bank credit’s conduction process.2. This paper sets time series model of commercial banks’ risk-taking to all levels ofmoney supply and inter-bank offered rate, therefore measures short and long term effectsof theoretical analysis.