Research On The Impact Of Capital Adequacy Ratio On Monetary Policy Transmission Mechanism

In the 1990s,Scholars began to try to link monetary policy transmission with the capital status of commercial banks under the influence of Basel Report.After the financial crisis,China's economy continued to show a "downturn".Since January 1,2012,the central bank has reduced the deposit reserve ratio 10 times in a row,in order to achieve the goal of stimulating output and prospering the economy.However,the effect is not satisfactory.As the core link of monetary policy transmission,commercial banks play the role of "main financing channel" in the Chinese capital market that is not yet fully mature.Its response to monetary policy and capital supervision will directly affect the transmission effect of monetary policy.Therefore,it is of great practical significance to study the impact of capital adequacy ratio of commercial banks on the transmission of monetary policy.This paper combines qualitative analysis with empirical research.Firstly,combing the theoretical basis of monetary policy transmission systematic,summarizing the literature and achievements at home and abroad.Secondly,discussing the transmission channels and transmission mechanisms of monetary policy in the banking system in detail,and analyzing the role of commercial banks in different channels.Then,Qualitative analysis of the capital adequacy ratio,credit scale and monetary policy intermediate variables of 21 listed banks from 2003 to 2017,and clarifying the impact of capital adequacy ratio on monetary policy transmission in different periods.Finally,the annual data of capital adequacy ratio and loan scale of 21 banks were selected,combined with the annual data of macroeconomic indicators such as GDP,and four variables such as M1 and deposit reserve ratio were introduced as the monetary policy proxy variables,respectively.The panel model regression of random effects and fixed effects leads to the conclusion of the study and proposes policy recommendations.The study found:1.The bank transmission channel of monetary policy exists in China.2.The constraint of capital adequacy ratio is beneficial to monetary policy tools whick playing a role in promoting the achievement of policy goals.3.The effect of capital adequacy ratio on monetary policy is more obvious during the period of loose monetary policy.4.At present,China's monetary policy will be mainly transmitted through large and medium-sized banks with high capital adequacy ratios.Based on the current domestic and international economic situation and research conclusions,this paper first suggests that the supervisory authority should continue to maintain strict requirements for capital supervision and maintain the high capital adequacy ratio of commercial banks in China.Second,the monetary authorities should try to capitalize when implementing monetary policy.Regulatory and monetary policy measures are used together to create a "combination boxing" to give full play to the role of capital supervision in correcting the behavior of commercial banks.Finally,this paper suggests that policy authorities and supervisory authorities should treat different banks differently when formulating policies.To achieve "the right medicine",we should also fully consider the behavioral tendency of commercial banks in different economic cycles.