The Impact Of Money Market Development On Monetary Policy Bank Credit Channels

Under China's banking-dominated financial structure,the bank lending channel is an important channel in the transmission of monetary policy.The theoretical basis for monetary policy to function through bank lending channels is that changes in monetary policy will affect the cost premium for banks to obtain funds from outside,thus changing the willingness and scale of banks to issue loans.The development of the money market has optimized China's financial market and provided strong support for economic development Facing the development of the money market,has the effect of bank lending channels on the transmission of monetary policy changed?What effect will the development of the sub-market of the money market have on its transmission effect?After the development of the money market affects the characteristics of banks,will the transmission effect be changed?This article focuses on the three questions raised,theoretically analyzes the basic mechanism of monetary policy transmission,the bank lending channel mechanism and its influencing factors,and preliminary statistics on the development of the currency market and submarkets in the past decade.The characteristics of banks and the implementation process of monetary policy are briefly sorted out,and research hypotheses are proposed based on the theory.Then refer to the dynamic GMM to establish the model,adopt the fixed effect difference method,introduce three cross variables for empirical analysis,and finally change the sample timing and monetary policy indicators to test the robustness.Using the micro-data of various bank samples from 2010 to 2018,this paper studies whether the development of the money market weakens the effect of bank lending channel under monetary policy.The results show that the mechanism that influences the effect of money market development on bank lending channel is achieved by affecting the structural substitution elasticity of the assets and liabilities of the bank's balance sheet.Different from theoretical expectations,the total effect of money market development on the impact of bank lending channels is not significant,and even if the interest rate marketization reform is taken into account,this conclusion is also established.However,further structural analysis shows that the effect of the money market has a strong heterogeneous effect on the internal structure of the money market and the type of bank.On the one hand,the development of the money market has expanded the size of the money fund market,thereby strengthening the bank lending channel under monetary policy;on the other hand,the development of the money market has further improved the interbank lending market and the bill market,thereby weakening the bank lending channel under monetary policy.From the perspective of bank characteristics,the development of the money market is mainly to weaken the impact of bank liquidity differences on bank lending channels under monetary policy,but the impact on bank size and bank capital adequacy ratio is not significant.The policy implication of the results is that the transformation of monetary policy regulatory from quantitative to price requires the comprehensive reform of the economic system to eliminate various financial frictions,and the timing of the reform must take into account the changing characteristics of the financial structure.