Research On The Influence Mechanism Of Monetary Policy On The Leverage Ratio Of Non-financial Enterprises

The outbreak of the US subprime mortgage crisis in 2008 made the instability caused by high leverage highly concerned by governments around the world.Some scholars believe that the instability of the financial system brought about by the high leverage brought about by excessive credit expansion is an important reason for the crisis.The outbreak of the financial crisis and the economic crisis have brought the world economy into a new round of depression.In order to cope with the weak economic growth rate and the interest rate pressure brought by the Fed's interest rate hikes,China has adopted a economic stimulus plan.This strong stimulus plan includes an expansionary fiscal policy that includes infrastructure construction and a loose monetary policy.In the second half of 2008,the People's Bank of China repeatedly stimulated the economy through monetary policy tools.The benchmark interest rate for deposits and loans was lowered five times,and the loan interest rate for six months fell from 6.21% to 4.86%.The reserve requirement ratio was lowered four times in the second half of the year,the restrictions on bank credit planning were removed,and commercial banks were encouraged to expand the total amount of loans.In 2009 and 2010,loose monetary policy was implemented.At the end of 2010,the interest rate of demand deposits has dropped to 0.36%.After a brief return in 2011,it entered a new round of interest rate cuts in 2012.The loose monetary policy has brought about a good effect on China's post-crisis economic,but the sharp increase in leverage has also brought greater risks to financial stability and sustained economic growth.China's non-financial sector leverage rate rose rapidly from 147% in the first quarter of 2007 to 179.2 %in the fourth quarter of 2009,an increase of 22%,and reached a peak of 253.4% in the first quarter of 2018,up 72.4% from the pre-crisis period.The leverage ratio and the loose trend of China's monetary policy have obvious simultaneous changes.The level of leverage of non-financial enterprises has already ranked first in the world,and China's high nonfinancial leverage has attracted the attention of the government and the public.Both Moody's and Standard & Poor's downgraded China's sovereign rating in 2017 because of the strong relation between high leverage ratio and the risk of financial market.Leverage has become a hot issue in the current economic field.Through the combing of the relevant literature on monetary policy and leverage ratio and the transmission mechanism of monetary policy,this paper argues that to regulate the rapid rise of the leverage ratio of non-financial enterprises,monetary policy is important.Therefore,this paper will empirically analyze the impact mechanism of monetary policy on the leverage ratio of non-financial enterprises by establishing the DAG-SVAR model.Before establishing the model,the stationary time test of the time series of the analysis and the cointegration test between different sequences are firstly carried out,and then the 4-variable vector autoregressive model of the third-order lag is determined by the lag rule.The structural matrix of the structural vector autoregressive model is determined by the directed acyclic graph(DAG)technique and the PC algorithm to identify the causal relationship between the variables,and the stability of the model is tested.Through the established time series model,this paper uses the structural pulse analysis and variance decomposition method identified by DAG technology to analyze the impact of money supply and the impact of interest rate changes.This paper believes that the current quantitative monetary policy in China has the shortest time-lag for the stability of leverage and leverage,but it disappears fast with time;The price-based monetary policy has a good regulation effect on the leverage ratio in the short to medium term,but there will be a phenomenon of overturning in the longer period;the simple use of monetary policy to regulate the leverage ratio may cause further contraction of economic growth,thus The level of leverage has been further aggravated;with the gradual improvement of China's current interest rate marketization mechanism,market interest rate as a mediator of monetary policy has a better effect on the adjustment of leverage ratio than the change in money supply;The high rate of difficulty is largely caused by its own inertia and affects the fluctuation of leverage.Therefore we can get our recommendations for policy :(1)In the process of formulating monetary policy,it is necessary to consider the coordination between short-term goals and long-term goals from the perspective of overall development;(2)“lower leverage” and “stable leverage” should be based on structural optimization.Seeing the important role of moderate leverage in economic growth,avoiding excessive use of tightening monetary policy to de-leverage;(3)in the process of deleveraging,China's monetary policy should pay attention to maintaining a stable neutrality,and in the medium and long-term,China needs to adopt a structure.Sexual reform and transformation gradually digest the problem of high leverage;(4)Non-financial enterprises should focus on the structural differences of enterprises and avoid simple and rude;(5)Deleverage should be combined with the actual situation in China to avoid new problems caused by deleveraging.Potential risks(6)further promote the improvement of China's capital structure,accelerate the speed of high-quality enterprises' "debt-to-equity swaps",and let the market play a major regulatory role.