The Impact Of New Monetary Policy Tools On Financial Leverage

Since 2013,the People's Bank of China has successively established new monetary policy tools such as Standing Lending Facility(SLF),Medium-term Lending Facility(MLF)and Pledged Supplementary Lending(PSL),In order to better meet the needs of macroeconomic regulation under the new normal of the economy.These tools have both quantitative and price characteristics,which not only make up the liquidity gap caused by the decline of foreign exchange occupation,but also play an important role in the construction of interest rate corridor.At the same time,China's high financial leverage problem is prominent in recent years,and its roots are mainly reflected in the regulatory arbitrage of financial institutions,idling arbitrage and other violations.This paper attempts to link the new monetary policy tools and financial leverage,in hope to study the relationship between the two.For this reason,this article is based on the balance of new monetary policy tools since May 2015,stand in the perspective of banking Sector,and select representative indicators of financial leverage from the perspective of macro,medium and micro.The empirical results show that MLF has a significant influence on the selected financial leverage indicators and can be used as an important tool to control leverage.PSL has significant influence on the 'year-on-year growth of interbank assets'.SLF has no significant influence on the above financial leverage indicators.This paper argues that MLF is not only responsible for issuing base money,but also an important tool for central banks to guide medium-and long-term market interest rates.PSL is also an important tool for central banks to release base money,however,due to its low transparency and single target of operation,it is difficult to become a tool to regulate medium-and long-term interest rates.SLF is widely applicable and plays an important role in constructing the upper limit of short-term interest rate corridor,but the central bank has shifted its focus from short-term interest rates to longer-term rates.For financial deleveraging,We should actively explore the prudent deleveraging method in accordance with the 'New Rules on Capital Management',and to promote structural deleveraging.We also need to prevent systemic financial risk from undifferentiated deleveraging.