Analysis Of Credit Rationing On China’s Monetary Policy Effect

Economists’ attention and the study of about credit market are almost throughout the entire development process of economics. Since the classic paper of Stiglitz&weiss (1981) about the credit rationing, credit market is the incomplete market under asymmetric information, credit rationing is the results of’adverse selection’ under the condition of incomplete market. However, different from the market economy of western developed capitalist country, our state protect and support particular industry, enterprises or projects since the existence of China’s interest rate restrictions, the information asymmetry and not perfect system environment, while medium-sized enterprise faces loan difficulties, so China’s credit rationing presents a’relational’credit rationing characteristics. This paper defines credit rationing of commercial banks according to our country’s reality and analyses the reasons of credit rationing.Meanwhile this paper analyzes since1998commercial bank credit rationing degree of change from the credit to GDP ratio, our country investment structure, the change of financial institutions excess reserves rate.As one of the important loan behaviors of a commercial bank, credit rationing in the nature of fluctuation with the procyclical, which against the counter cyclical target of the central bank’s monetary policy, with the result of that it weakens the effect of the monetary policy. This paper analyzes theoretically credit rationing on the impact of monetary policy that is asymmetric and has time lag effect, explains that the effects of tight monetary policy is often stronger than the expanded monetary policy in the credit channels and analyses credit rationing in different stage of the economic cycle on the impact of monetary policy from the practice of monetary policy in China since1998. By using the econometric model which was put forward by Galbraith in1996, we can use the maximum LM test and maximum t test to calculate the’threshold value’which can reflect the degree of our country’s credit rationing from January1998to December2010, the result shows that: the degree of credit rationing was eased from July2003to December2007, and it was accentuated from January2008to December2010, with the distinguishing characteristic of procyclical. The measure results also can show that the asymmetry of the implementation effect of our country’s monetary policy. In the end of this paper, it discusses the solution to overcome the procyclical of credit rationing from the aspects of cultivating the credit market players, improving the institutional environment of the credit markets, improving financial supervision etc.Commercial banks’behaviour of credit rationing will directly affect the efficiency of the allocation of credit funds, thus affects the effectiveness of monetary policy. This paper studies the commercial banks’ credit rationing behaviour on the impact of monetary policy, making the bank behaviour theory which belongs to microeconomics in the traditional sense really conducts together with monetary theory and monetary policy which belongs to macroeconomics through credit channels. Research on China’s commercial bank credit rationing behaviour and analysis of credit rationing mechanism of monetary policy not only help us understand the nature of China’s monetary policy and its way of effecting economic from the microscopic basis, and then take the appropriate measures to mitigate credit rationing procyclically, to improve the effectiveness of the monetary policy,and help us to better understand the problems of our credit markets, improve the efficiency of credit capital allocation and solve the plight of financing of SMEs.