Research On The Influence Of Internet Finance On The Effective Of Intermediary Targets Of Monetary Policy

In 2013,known as the "first year of Internet finance",China's Internet Finance entered the stage of blowout development with continuous innovation of its model,products and processes.The emergence of Internet finance has not only changed the traditional financial institutions which promoting financial innovation and the process of interest rate marketization greatly,but also had a profound impact on China's economic development.However,compared with developed countries such as Europe and the United States,China's Internet finance has a relatively short history and lack of relevant experience to development.What's more,immature financial market,lack of effective supervision,imperfect laws and regulations make China's monetary policy and financial environment are vulnerable to the impact of Internet Finance under such background.Internet Finance weakens the relevance between the effectiveness of monetary policy intermediary target and the real economy by affecting the effectiveness of the intermediate target of monetary policy and the transmission channel mechanism of monetary policy.Therefore,it is of great theoretical and practical significance to study the impact of Internet Finance on the effectiveness of monetary policy intermediary target.This article adopts a combination of theoretical and empirical analysis and overall research ideas are as follows: Internet financial background and current situation,theoretical analysis,empirical analysis,summary and recommendations.First we introduce the background of the development of Internet finance,that is,Internet coverage and applications.At the same time,we define the concept of Internet finance in this article and sort out in detail the operating models and development status of various forms of Internet finance.Secondly,theoretically,based on Fisher's trading equation and money demand theory,we combine mathematical derivation with the characteristics of Internet finance to analyze its impact on the quantitative and price-based monetary policy intermediary targets and the transmission mechanism of monetary channels.Among them it also analyzes the impact of Internet finance on factors related to money supply.The currency transmission channel mechanism includes the credit transmission mechanism and the interest rate transmission mechanism.The results show that Internet finance reduces the threshold for financial management,the average currency circulation speed,the stability of overall money demand,and the effectiveness of the money supply as an intermediary target.However,the development of Internet finance has promoted the process of interest rate marketization,the effectiveness of interest rates as intermediary targets,and strengthened the correlation between interest rates and economic development.Internet finance has weakened the effectiveness of the credit transmission channel and its relevance to regulatory objectives,strengthened the effect of the interest rate transmission channel,reduced the ability to control social credit,lengthened the credit chain,and increased the sensitivity of traditional financial institutions to interest rates.On this basis,in order to further test the theoretical analysis results of Internet finance on the monetary policy intermediary target,appropriate indicators are empirically selected to establish a VAR model.Monetary policy intermediary target indicators are selected from the perspectives of quantitative and price-based monetary policy respectively: money supply,and Shanghai Interbank Offered Rate.While researching the impact of Internet finance on the money supply,the impact on money supply-related factors including the currency multiplier,the average currency velocity,and the demand for money are also be researched.Internet finance selection indicators are the third-party payment transaction size,third-party payment agent variables(the ratio of the third payment transaction to the narrow money supply),and the 7-day annualized return of Tianhong Fund.In addition,in the robustness test,the variable is the size of Internet index transactions.The results show that the development of Internet finance has an expansion effect on the currency multiplier and the money supply,reducing the stability of the average currency circulation speed,weakening the relationship between the money supply and economic goals and the effectiveness of the money supply as an intermediate target.As for interest rates,both long-term and short-term have a positive effect.The development of Internet finance has promoted the process of marketization of interest rates and increased the effectiveness of interest rates as intermediate targets.In order to further test the reliability of the results,the variable of Internet financial index turnover is introduced to test the robustness of the model,and finally the results are consistent with the above.Finally,based on the conclusions of this article,we put forward suggestions from three aspects: re-examining and optimizing the intermediary goals of monetary policy,improving credit channels,and regulating the Internet financial industry.With a view to optimizing the intermediary goals of monetary policy and enhancing the correlation between monetary policy tools and economic development,it's also worthy to allow the development of Internet financial norms and the governance of industry chaos.