Coordination Of Commercial Bank' Behavior And Monetary Policy Of China

The transmission mechanism of monetary policy and the regulative effect has been the key focus of economists,the successful conduction and the effective implementation of the monetary policy is very important for the development of China's macroeconomics.As an important microeconomic entity in the transmission mechanism of monetary policy,commercial banks'credit decision-making behavior has a significant impact on the regulative effect of the monetary policy.Driven by the motivation of chasing profit,firstly,the credit activities of commercial banks have a clear procyclical character.Its significant "credit grudging" during the economic downturn would distort the original intention of the monetary policy which intends to promote economic growth.In addition,as economy enters the "new normality",financial disintermediation has made spreads income profit of commercial banks be compressed.The commercial banks make money flows to the restricted areas through the channel of interbank,such as the real estate market and local government financing platform,which results in an increased systematic financial risk.This paper builds a DSGE model which includes households,firms,entrepreneurs,capital producers,financial intermediaries and monetary authority.Through the impulse response of the commercial banks' spreads,capital and the main macroeconomic variables,such as production,consumption,investment and inflation,which in the face of quantitative monetary policy impact and price of monetary policy impact,we draw the conclusion that,commercial banks as mediation of transmission mechanism of monetary policy,its profit-driven behavior would weaken the impaction of regulative effect of monetary policy to macroeconomic fluctuation.In addition,interest rate rule is more effective than money growth rule in China.Finally,according to the results of the simulation analysis,this paper gives some relevant policy suggestions about the improvement of the business activities of commercial banks,the traditional mode of macroeconomic regulation and prudential supervision system.