A Study On The Influence Of The Internet Finance On Monetary Policy Credit Transmission Mechanism In China

In the last decades,a series of new words,such as E-commerce,Internet lending and Yu'e Bao,have gradually appeared,and quietly changed people's consumption habits and financial concepts.All these phenomena are the results of the raising of Internet Finance.Relaying on development of technology and Chinese demographic dividend,E-finance exploded and widely spread in China.There is a great amount of studies which investigate the topic related to internet finance.Indeed,the internet finance has helped the small business in China for financing;however,at the mean time,there are also some problems due to the raising of Internet Finance.Monetary policy is one of the most important methods used by government to control macro-economy in China.It mainly controls the overall health and stable development of the national economy by making use of the relationship and influence between money and macroeconomic variables.Commercial banks play an important role to ensure the monetary policy transmits effectively and efficiently.However,there raises a concern that whether the monetary policy effectively influence on economy with the increasing of Internet Finance.The rest of my paper contains 5 sections.The first part is the cornerstone of this paper,which mainly reviews the previous literatures and theories.The second part talks about the definitions of the key subjects in this paper,such as Internet Finance.Combined with the influence of Internet Finance on the two links of monetary policy credit transmission,theoretical analysis is carried out one by one.The third part introduces the present situation of the Internet Finance and monetary policy system in China,posits my hypotheses.The fourth part talks about the methodologies and empirical results.I mainly use VAR model,impulse response function and variance decomposition.The fifth section is the conclusion and policy suggestion of this paper.I find that Internet Finance has developed rapidly and will keep this trend for the future.However,the credit transmission is still an important mission channel of China's monetary policy and Internet Financial weakened the effect of credit transmission mechanism of monetary policy in China to a certain extent.People's bank of China need to face with the challenges caused by E-finance and perfect our country's monetary policy system.The main contributions of this paper as follows: First,this paper takes the credit conduction path of monetary policy as the main research object,starting from the two aspects of the credit transmission path,combined with the actual situation in China,analysis influence of the Internet Financial.Second,by using Chow Test and VAR model,I analyze the Internet Finance indicators such as the third party payment,P2 P network loan in order to draw an accurate conclusion.