The Study Of Risk-taking Channel Of Monetary Policy’s Time Asymmetry

The study of risk-taking channel of monetary policy’s time asymmetry is one of the hot issues in international economics studies and domestic-related research in recent years, since it not only has a very important reference about how to appropriately control bank risk in the short term, to prevent banks from excessive regulation, maintain financial sustained and stable development of the economy, but also to explore the potential financial risks crisis and prevent excessive accumulation of bank risk over a longer time, and thus impact on the financial sector, triggering a new round of real economic fluctuations and the financial crisis.And many scholars have tried to analyze the reasons of risking-taking channel of monetary policy’s time asymmetry by the operation mechanism of risking-taking channel of monetary policy. The most authoritative view is that the risking-taking channel of monetary policy’s time asymmetry is due to the interaction of the interest rate pass-through effect, risk transfer effects and bank leverage. Among them, The size of the risk transfer effects which play a positive role in the relationship between monetary policy and the bank risk-taking depends bank leverage ratio, and the size of the interest rate pass-through effects which play a positive role in the relationship between monetary policy and the bank risk-taking depends banking market structure, so with the interaction of bank leverage and banking market structure,the impacts of short-term and long-term monetary policy monetary policy for bank risk-taking are showing a different state.Taking china’s monetary policy and macroeconomic characteristics in recent years into account, we have studied that if bank leverage and structural changes in the banking market would affect the risk-taking Channel of Monetary Policy’s time asymmetry. How big? In the current under the background of the financial reform, is obviously a very worthy of study.In this regard, first of all this paper has studied the existence of bank’s risk-taking channel of monetary policy asymmetry, based on the 2003 to 2013, we select 163 banks data to construct panel data. Firstly, we use the panel model to analyze if bank risk-taking channel of monetary policy has time asymmetry. Secondly, on the basis of taking bank leverage ratio into account, we use panel threshold model and panel smooth transition model study the relationships between the short or long-term monetary policy and bank risk-taking. Again, we use the panel threshold model and panel smooth transition models further investigate relationships between the short or long-term monetary policy and bank’s risk-taking with the interaction of bank leverage and banking market structure. The empirical results show that:Firstly, without considering the bank leverage and banking market structure, the short-term monetary policy positively correlates with bank’s risk-taking, which means loose short-term monetary policy will reduce bank’s risk-taking. The long-term monetary policy has negative correlation with bank’s risk-taking, which means loose long-term monetary policy will increase bank’s risk-taking.Secondly, with further considering the bank leverage, we find that, firstly, highly leveraged banks in the face of loose short-term monetary policy would tend to increase bank risk-taking, and lowly leveraged banks tend to reduce bank risk-taking. Secondly, levels of bank’s leverage ratios don’t affect the relations between the long-term monetary policy and bank risk-taking.Thirdly, we use the panel threshold model to analyze the impact of the bank leverage ratio on the relationship between the short-term or long-term monetary policy monetary policy and bank risk-taking, the relation between short-term monetary policy and bank risk-taking has threshold bank leverage ratio. As the degree of bank leverage ratio becomes large, once it exceeds a certain threshold, the relation between short-term monetary policy and bank risk-taking will become significantly different, the relation between long-term monetary policy and bank risk-taking doesn’t have a threshold bank leverage ratio.Then, we use panel threshold model to analyze if the impact of bank leverage ratio on the relationship between short-term monetary policy or long-term monetary policy and bank risk-taking has any differences in the different banking market structure, The results show that:Firstly, bank leverage ratios play a positive role in the relationship between short-term or long-term monetary policy and bank risk-taking in different banking market structure, secondly, with the reduction of bank concentration (banking market competition increases),the bank leverage ratio threshold that makes the relationship between short-term monetary policy and banking risk-taking being changed will decrease; Even in different banking market structure, the relationship between long-term monetary policy and bank risk-taking doesn’t have a bank leverage ratio threshold.Finally, at first, we use panel smooth transition model to study if the impact of banking market structure on the relationship between short-term monetary policy or long-term monetary policy and bank risk-taking has any differences in the different bank leverage ratio, The results show that:with the increasing of bank leverage ratio, the bank concentration transition value that makes the relationship between short-term monetary policy and banking risk-taking being changed is increasing. The relationship between long-term monetary policy and banking risk-taking will change if the bank concentration is changing. Secondly, with the comparison of different perspective’s impacts on the relationship between short-term or long-term monetary policy and bank risk-taking, we find that when we use short-term monetary policy and macro-prudential supervise financial stability policy, you should focus more on bank leverage ratio’s impact on the relationship between short-term or long-term monetary policy and bank risk-taking,instead, when we use long-term monetary policy and macro-prudential supervise financial stability policy, you should focus more on banking market structure’s impact on the relationship between short-term or long-term monetary policy and bank risk-taking.