The Research On Transmission Mechanism In The Balance Sheet And Effect Of Monetary Policy

After the financial crisis in 2009, developed countries have been taking the quantitative easing monetary policy. The unconventional monetary policy is beneficial to slow the volatility in financial markets and repair the damage of the transmission mechanism of monetary policy to a certain extent. Most monetary base of the people’s bank of china’s circulation rely on foreign exchange. The central bank added many new monetary policy tools in term of assets to alleviate this situation and through lowering the deposit reserve rate and lowering interest rates to increase the monetary base, continuously released QE signal in the last two years. Recently, Chinese QE is always the key point of the economists discuss, at the same time, quantitative easing main transmission mechanism is the balance sheet transmission mechanism. In this paper, we study the central bank monetary policy regulation ability, term mismatch and currency mismatch in Bank balance sheets, The problems existing in the process of the enterprise and the household sector ’ balance sheet when monetary policy conducted. On this basis, puts forward policy suggestions to the various departments in our country the present situation of the balance sheet, discusses the problems should be paid attention to the implementation of quantitative easing.In this article, we choose the 2007-2015 annual data of the central bank balance sheet, through the analysis of the change of the quantity and the structure of various secondary subjects, it is concluded that China’s central bank regulation and control ability is insufficient, so we should increase the quantity of ‘currency issue’, decrease the quantity of ‘foreign exchange assets’, participate in more financial affairs and refinement the subject of the balance sheet to improve the predictability of the monetary policy. At the same time, analysis of bank interest rates’ variation again, from this we know the reasons that cause the bank’s term mismatch and the change trend of it. Choose the monthly data from 2007 to 2015, using factor analysis method to create a currency mismatch index, and then analyses the reason of currency mismatch. This article introduce the currency mismatch index in the SVAR model that use to analysis the effectiveness of the enterprise and household balance sheets transmission mechanism in fourth chapter. Through analysis the 2010-2015 monthly data of the enterprise sector’s balance sheet, we found that loans of financial institutions can optimize the enterprise ‘s balance sheet, on the other hand the condition of enterprise’s balance sheets change can’t influence the loans of financial institutions. At the same time, through corporate balance sheets, the monetary policy transmission effect to national income and the price is limited, monetary policy in the conduction process through enterprise’s balance sheet is blocked, need to dredge the balance sheet of the enterprise. Choose the monthly data in 2007-2015 when tested for effectiveness of the household’s balance sheet, found that residents savings and stock assets no significant effect on consumption, but the real estate assets is a good way to drive consumption, then through consumer affect the economy; Monetary policy was not significant effects on residential property assets,but can effect residents savings and stock assets in some extent; By residents of the balance sheet,monetary policy can effect on national income and prices in some extent; monetary policy in the conduction process through household sector ’s balance sheet is blocked, need to dredge the balance sheet of the enterprise. The last, According to this problem that exist in the transmission we put forward suggests to improve the regulating and conduction ability of central Banks and optimization of the balance sheet transmission mechanism of policy recommendations on the basis of the analysis of previous chapters. Realize that if the quantitative easing policy will be taken, the people’s bank of china should be paid attention to the present situation that existing policy tools in China is still lack of flexibility, the proportion of foreign currency assets in total assets is higher, monetary policy foresight is poor, bank’s currency mismatch and term mismatch problem is serious.