China's Monetary Policy Stance And Commercial Banks' Risk Taking

The impact of monetary policy on bank risks has attracted much attention from all walks of life,and the risks brought by its practice also require people to deepen their understanding of monetary policy.In recent years,many scholars have conducted relevant research on the impact of monetary policy on bank risk taking,but few studies have explored the relationship between the two on the basis of distinguishing monetary policy stance.This paper focuses on the practical issue of the impact of monetary policy on bank risk taking,and based on the theoretical model of risk taking transmission,studies the internal relationship between monetary policy stance and bank risk taking on the basis of distinguishing different monetary policy stances.In terms of research methods,based on 98 commercial banks in China from 2009 to 2017,this paper uses the residual method to measure the monetary policy stance,and uses the GMM estimator to empirically study the impact of monetary policy stance on the bank risk taking of China.Further,this paper extends the influence to asymmetry and durable effects,and is verified by empirical evidence.Through empirical research,this paper finds the following conclusions.First,there is a significant correlation between monetary policy stance and bank risk taking.The accommodative monetary policy leads to the aggravation of the risk taking level of commercial banks and vice versa.Secondly,the impact of China's monetary policy stance on bank risk taking is asymmetric.The negative effect of accommodative monetary policy is significantly higher than the positive effect of tight monetary policy.Third,a durable period of accommodative monetary policy will further strengthen and enhance the level of bank risk-taking resulting from the accommodative policy stance.Based on the research results,this paper puts forward the following suggestions.First,in terms of policy formulation,the implementation of monetary policy should be combined with the macro-prudential policy to implement the accommodative monetary policy in the economic downturn cautiously and avoid flooding.Second,in terms of institutional supervision,authorities should push forward penetrative supervision,pay close attention to the multiple nesting of bank products,actively guide off-balance sheet business to return to the balance sheet,and guard against the failure of monetary policy transmission.Thirdly,banks should fully consider their liquidity and safety requirements,maintain prudent management attitude,break the inertia of "rigid payment",and optimize resource allocation.