The Impact Of Targeted RRR Cuts Policy On Commercial Bank Credit

Under the new normal of economy,small and micro enterprises and agricultural entities are bearing the pressure of upgrading.As a structural monetary policy,the targeted RRR cut policy is more accurate and flexible than traditional monetary policies.It is a problem whether the targeted RRR cut policy can be transmitted through bank credit channels to ease the financing constraints of small and micro enterprises and agricultural entities,and promote them.With the influx of foreign banks after the opening of the financial industry,the development of private financial institutions and Internet financial institutions,and the advancement of interest rate liberalization,the competitive landscape of the Chinese banking industry has undergone further changes.The degree of bank competition may also affect the transmission of targeted RRR cuts.Based on the data of 36 A-share listed banks in China from 2011 to 2018,this paper builds the unstructured bank competition and structured bank competition measurement,including H statistics,Lerner index,the market concentration CR₆ and the Hefindahl Index?HHI?.Then,this paper builds fixed effect model to evaluate the effect of targeted RRR cut policy on the bank credit and the effect of bank competition in the transmission of targeted RRR cut policy.The results show that,first of all,as a structural monetary policy,targeted RRR cut policy have the aggregate effect of monetary policy and can enhance the overall credit level of banks.Secondly,the directional control effect of targeted RRR cut policy is more significant in promoting small and micro corporate loans than agricultural-related loan,which may be due to the fact that the main agricultural loan entities have more natural risk.Thirdly,when the degree of competition among banks increases,the policy of targeted RRR cut policy for the adjustment of overall credit and the targeted incentive effect of small and micro enterprise credit will be weakened.The reason may be that the increased degree of bank competition will reduce the relationship lending between banks and small and micro enterprises,agriculture-related entities.The aggravation of information asymmetry raises the bank's threshold for risk loans.Finally,the results of bank heterogeneity analysis show that,state-owned banks are more responsive to targeted RRR cut policy than joint-stock banks and regional banks.The reason may be that state-owned banks are different from other banks in the nature of equity,strategic positioning,and marketization.