The Study Of Unconventional Monetary Policy Effect Under The Background Of Bank Competition

Chinese economy has experienced several decades of rapid growth while it is also facing with structural distortion problems of financing.In the condition of acute structural imbalance,the People’s Bank of China innovates many unconventional monetary policy tools,trying to realize delicacy management.These tools show a new direction of development.It has certain theoretical and practical significance for the study of regulatory effects of these unconventional monetary policies.The unconventional monetary policy tools take banks as the directional operation object and banks’ behaviors will influence their implementation results.Through influencing the credit behavior of banks,bank competition will affect the transmission channel of unconventional monetary policy and ultimately will affect its applying results.Thus it is worth to do a further research in the field of unconventional monetary policies on the basis of bank competition.With corporates’ financial data,this paper uses DID to do fixed effect regression and tests targeted RRR cuts’ effects in rural credits and small business loans.This paper introduces bank competition into model to analyze the impact brought by bank competition on the effects of unconventional monetary policy.Empirical results show that,the targeted RRR cuts have an impact on the credit target and this impact is more significant as time went on.Bank competition would strengthen the impact of unconventional monetary policy,and the promotion is mainly manifested in the small and micro loans.Based on these empirical results,this paper suggests that the central bank should strengthen supervision of the implementation of unconventional monetary policies.Competitive behaviors among banks should be improved to increase its beneficial effects on implementation of unconventional monetary policies.