Effectiveness Of Macro-prudential Policies

By systematically combing the use of China's macro-prudential policy tools from 2007 to 2017,and measuring the default risk of listed banks based on micro-data of 23 domestic listed banks and KMV models in these 11 years,and then using the system GMM model for panel data regression,we can test China Effectiveness of macro-prudential policy tools.Research above shows that macro-prudential policy tools can effectively curb the default risk of listed banks,and thus prevent the banking crisis.At the same time,macro-prudential policies may have an effect on the default risk of listed banks by affecting profitability and excessive risk-taking behavior.The tightened capital macro-prudential policy will not directly affect the bank's credit business,which will allow banks to have greater autonomy in operating their businesses.While increasing the bank's profitability,it will also objectively encourage excessive risk taking,leading to the role of such policies insignificant.The tightened macro-prudential policy on assets directly controls credit demand by directly restricting lenders.Although the profitability cannot be significantly improved due to more intense competition,it has reduced the bank's excessive risk exposure while reducing credit scale.The behavior makes the effect of asset policy tools stronger than that of liquid policy tools.In addition,affected by factors of risk level and radiation scope,the effect of macro-prudential policies on state-controlled large commercial banks is the most obvious,the effect on joint-stock commercial banks is not as good as state-controlled large commercial banks,and the effect on urban/rural commercial banks is not significant enough.