Research On Macro-prudential Regulation Of Cross-border Capital Flow In China

In recent years,China's cross-border capital flow reflects a new trend of "two-way fluctuation",under the influence of internal and external factors such as complex global economic and financial situation,domestic economic cycle and structural adjustment.The strong volatility of cross-border capital flow not only amplifies the risk of macroeconomic and financial markets,but also puts forward higher requirements for foreign exchange management.Facing these new challenges,the effectiveness of the existing micro-market regulatory mode appears obviously insufficient.Therefore,strengthening the macro-prudential regulations of cross-border capital flow and conducting counter-cyclically adjustments with the macro-prudential regulations by discretion both meet the urgent needs to maintain the stability of China's economic and financial system,to improve the independence of monetary policy,to promote the convertibility of capital accounts and the internationalization of RMB,and to realize the deepen strategy of China's reform and development.After the international financial crisis,People's Bank of China and State Administration of Foreign Exchange have issued macro-prudential regulations for cross-border capital flow,including the integrated position management of the bank's foreign exchange inflow and purchase,the full-caliber cross-border financing and the risk reserve capital of foreign exchange derivatives.The above practices prove the effects that the short-term cross-border capital speculation has been curbed,and the risk of cross-border funds running in one way has been alleviated and the pressure of RMB exchange rate has been released.However,the current macro-prudential regulations are limited for managing those long-term problems,which also ask to solve the problem of lacking an effective risk assessment as well as a response system as a whole.From the perspective of balancing the use between the monetary policy and the exchange rate policy and the cross-border capital flow supervision,this paper builds upChina's "Cross-border Capital Fluctuation Pressure Index" as a monitoring indicator to make quantitative assessment of the risk when cross-border capital fluctuates.According to the impact on position management,capital price,domestic macro-economy and international financial market,nine influencing factors comprised by balancing between foreign exchange sales and purchases,exchange rate,interest rate,inflation,domestic economic growth,degree of RMB internationalization,capital account openness,global money supply and international financial risk are chose as independent variables to measure the "Cross-border Capital Fluctuation Pressure Index".VAR model is utilized to analyze the risk-generating mechanism of cross-border capital flow and evaluate the effectiveness of corresponding supervision.Combining some relevant researches on foreign currency crisis with the practice of our country,the fluctuation pressure is divided into four different levels: balanced,moderate,medium and severe,and is parted into seven different intervals based on the direction of capital flow.The paper deeply discusses different macro-prudential measures in every interval on every level,which helps counter-cyclically adjustments by discretion make sense.Meanwhile,the paper proposes some suggestions to enrich our macro-prudential regulation toolkit,so that further improvements of our macro-prudential regulation system of cross-border capital flow can be realized.