The Effectiveness Of The "monetary Policy + Macro-prudential Policy" Two-pillar Framework

The economic recession caused by the outbreak of the financial crisis in 2008 triggered the reflection of the financial regulatory framework,the emphasis on the systemic financial risk and the exploration of the macro-prudential policy framework.It is widely believed in the international community that although monetary policy played a key role in the crisis,the shortcomings of relying on the single policy framework of monetary policy to deal with systemic financial risks have been exposed.Therefore,building a reasonable and effective macro-prudential policy framework has gradually become the main goal of the g20 and the imf.As an important member of the G20,China attaches great importance to the construction and improvement of macro-prudential policies,actively explores and innovates macro-prudential policy tools,and plays an important role in curbing procyclical fluctuations of asset prices and reducing systemic risks in the banking sector.As a new framework of financial regulation,macro-prudential policy has gradually become the second pillar of macro-regulation in China,and the framework of sound monetary policy and macro-prudential policy was formally put forward in the report of the 19 th national congress of the communist party of China(CPC).To explore the effectiveness of the two-pillar framework of "monetary policy + macro-prudential policy" is of great practical significance to explore the flexible coordination between monetary policy and macro-prudential policy and to improve and perfect the two-pillar macro-regulatory framework,which can provide a new direction for deepening the reform of the financial system and preventing and defusing systemic financial risks.This paper mainly explores whether macro-prudential policies can make up for the failure of monetary policies to play an effective role,and then proves the effectiveness of the two-pillar macro-control framework of monetary policy and macro-prudential policies.Firstly,the direct influence of Banks' risk bearing channels and credit channels on monetary policy transmission is discussed and analyzed theoretically.Secondly,this paper summarizes the macro-prudential policy tools,deduces the impact of macro-prudential policy on the bank's risk bearing channel and credit transmission channel of monetary policy respectively through the improved DLM model and the simplified balance sheet,and analyzes the logic and mechanism.Finally,combining with the existing research and the reality of our country,with different reserve dynamic adjustment mechanism as the proxy variable,macro-prudential policy based on 16 listed Banks in 2007-2017 micro data,using system GMM method empirically macro-prudential policy on the complement and the supplementary role of monetary policy,and then verify + double pillar macro-prudential policy regulation of monetary policy framework to reduce the bank risk bearing level and inhibit the effectiveness of the economic down cycle.The results show that:(1)both monetary policy and macro-prudential policy can reduce the risk bearing level of Banks,and macro-prudential policy can reduce the risk bearing level of Banks in the context of loose monetary policy.(2)the counter-cyclicality of macro-prudential policies can effectively restrain the blind impulse of Banks to launch credit under the loose monetary policy environment;Ease the tight monetary policy on the bank's credit supply shock,promote economic recovery.(3)in the economic period,macro-prudential policies make up for the deficiencies of monetary policies in countercyclical regulation of credit,but are prone to policy overshoot.(4)in the economic downturn,macro-prudential policies can make up for the deficiency of monetary policies in reducing excessive risk taking of Banks,but policy offsets are likely to occur.So,improve and perfect the double pillar macroeconomic regulation and control framework,should improve the monetary policy framework,promote market-oriented interest rate reform and improve the macro-prudential policy framework,promote mutual coordination between monetary policy and macro-prudential policy with flexible,to improve the effectiveness of the double pillar macroeconomic regulation and control framework,forward-looking and robustness.