The Effects Of Changes In Financial Structure On Monetary Policy

With the development of domestic economy, the financial structure had its severechanges in recent years. Certainly, these changes will bring some influence to both thetransmission channels and effects of currency policy. Research of mechanism, channels anddegree of above changes will have its great meaning in improving the operation and effects ofcurrency policy.This paper shows a systemic analysis of the impact of currency policy caused by changesfrom financial structure. First of all, this paper will give analysis of changes of China’sfinancial structure in three different aspects, including the structure of financial market,financial intermediaries and financial instruments. There are two obvious trend of changes infinancial structure in China at the present stage mainly lies in:(1) The proportion of directfinancing will be bigger and bigger;(2) The trend of mixed management will become evenmore clear.Then, this paper will emphatically analyze the influence of transmission mechanism andstrong effect of currency policy, which brought from changes of current financial structure.The mentioned influence is mainly manifested in:(1) When the operation in financial marketbecomes more and more popular, the credit transmission mechanism will become moreeffective;(2) When the degree of financial structurebecome higher, the transmission speed of interest rate will become faster and the currencypolicy will be refreshed frequently. The strong effect of currency policy is mainly reflected in:the off-balance sheet business of commercial banks and deposit volatility has increased thedifficulty of the currency policy regulation, and then the existing examination system ofcommercial banks weaken the strength of the effect of currency policy, at last, theconsideration of the total social financing and the development of China’s trade business is adouble-edged sword.Finally, suggestions are put forward to improve the operation of China’s currency policy,including:(1) To perfect the deposit reserve system construction, strengthen the adjustingbasic currency efficiency;(2) To promote the development of currency market and promoteopen market operations as the leading factor;(3) To accelerate the process of interest rate marketization, timely adjust market interest rates;(4) To develop the direct financing marketfor effective currency policy transmission channel;(5) To optimize the structure of bankingfinancial institutions, encourage private capital to enter the financial world;(6) To strengthenthe shadow banking supervision, to promote financial mixed management pattern;(7) Toadjust the currency supply monitoring index, make a better choice in selecting currency policyintermediary goal.