Research On The Monetary Policy Framework Based On Finance Sector Systemic Risk

It has long been discussed in academic and policy circles that whether consider financial imbalances and financial systemic risk in monetary policy operation.Before the outbreak of the financial crisis in 2008,academia is generally accepted that monetary policy should not consider financial sector systemic risk factors.lt's hard for monetary policy tools to meet the stable inflation and financial stability.After the financial crisis,people recognize that the stable operation of the individual financial institutions can't maintain financial stability,and the collapse of a single financial institution can expand the whole financial system because of contagion effect.The central bank need to consider the systemic risk factors of financial sector in monetary policy operation.There are many problems in our country's economy,such as economic structure adjustment and economic growth downward.The spread of the systemic risk becomes more frequent,and monetary policy operation has a a significant impact on steady economic growth.Based on it,this paper analyzes monetary policy risk conduction and risk bearing mechanism,and builds the monetary policy analysis model based on systemic risk.It also empirically analyzes monetary policy effectiveness in macroprudential perspective.This provides the reference for monetary policy decision-making and implementation in the future.By incorporating the systemic risk of the financial sector into framework of monetary policy,this paper studies the systemic risk based monetary policy framework based on the theoretical and empirical analysis.First of all,the article theoretically expounds the interaction mechanism between monetary policy and systemic risk.It not only analysis the impact on the financial sector of systemic risk to mechanism of monetary policy,but also analyzes the influence of the systemic risk to monetary policy effectiveness.Secondly,this paper introduces a systemic risk indicators of monetary policy analysis framework,and uses CCA to establish financial stability model.It builds the macro-prudential monetary policy analysis model considering financial sector systemic risk factors,by integrating financial stability model into monetary policy framework.Thirdy,this paper empirically analyzes the effect of systemic risk for the implementation of monetary policy,and analyzes the effect of systemic risk for some indicatiors such as output gap,inflation and interest rates.At last,in order to analyze the effectiveness of the systemic risk based monetary policy framework,this paper contrsats the main economic variables volatility under model considering financial sector systemic risk factors or not.This paper has the following main conclusions.First,monetary policy risk conduction and risk bearing mechanism enriched the monetary policy transmission mechanism,and systemic risk factors have influence on the effectiveness of monetary policy implementation.Second,the output gap in our country has certain correlation with systemic risk indicators.When the financial sector instability increased,it may have influence on the output gap.Third,the financial sector of systemic risk has direct influence on the output gap and interest rates,and monetary policy considering the financial sector systemic risk can reduce the volatility of the major economic and financial variables.So,this paper put forward the following suggestions.The central bank focuses on monetary policy risk and risk transmission channels in the process of formulating and implementing monetary policy.The central bank strengthens the financial sector supervision,and improves the risk disclosure and systemic risk early warning mechanism to control the financial departments systemic risk.The central bank raises the level and the scope of monetary policy to make sure the unity of monetary policy economic goals and financial stability.