Study On The Effectiveness Of China's Lending Facility

At present,our country is in a "new normal" economy structure adjustment and reform of the important stage.The driving factors of economic growth,the social financing structure and the economic growth are undergoing profound changes.In this stage,the traditional monetary policy tools are obviously inadequate in improving liquidity,stabilizing financial market and economic development.In order to solve this dilemma,the people's bank of China has actively innovated monetary policy tools and formulated the lending facility used in the context of the "new normal" of the economy.Firstly,we summarize the characteristics and classification of unconventional monetary policy theories and analyze the characteristics and mechanism of the lending facility.Secondly,we discuss the development of the international lending facility and briefly describe the application of the lending facility of the federal reserve and the European central bank,proposing to reference the significance for China.Thirdly,we analyze the lending facility of China from three aspects: background,application and effect.Then,through the method of empirical analysis,we study the effect of lending facility in China from three perspectives: interest rate,credit and agricultural investment.Finally,we put forward corresponding policy suggestions.In this paper,we find that lending facility can make a large injection of liquidity to the market,guide the money market interest rate,provide large scale of credit and promote investment in the field of agriculture.In particular,the standing lending facility can effectively promote the increase of credit scale;The medium-term lending facility can promote the decline of money market interest rate,the increase of credit scale of financial institutions and the increase of investment in agriculture.Therefore,in the future,the central bank of China can control the economy through the lending facility,and promote economic development and financial stability.