The Impact Of US Quantitative Easing Policy On Our Systemic Financial Stress

Finance is the core of modern economy,which is not only related to the development of national economy,but also related to the stability of the national economy and people’s livelihood.It can not only provide more financial support for the country,but also help enterprises achieve financing and create more job opportunities for the country,thus promoting economic development.Therefore,the stability of the financial market is crucial to the development of the society.Focusing on the impact of the US quantitative easing policy on China’s financial stress,this paper divides the research into four parts.Firstly,analyze the American quantitative easing policy to the American financial market as well as the transmission mechanism of China financial market,and draw out the corresponding path chart.Secondly,according to the theoretical analysis results and the path diagram,relevant data indicators are selected to make a causal network model,and the empirical study on the path diagram shows that the quantitative easing policy of the United States affects China’s financial market through the exchange rate,capital outflow,securities price index and other factors.Thirdly,in combination with the path diagram and studies of scholars,15 basic indicators are selected from foreign exchange,securities,bonds and other sub-markets for subjective weighting,and the systemic financial stress index can be synthesized to measure the systemic financial risk in China,and then,adopting the Markov zone transfer autoregressive model to identify the stress state of the financial stress index.Fourthly,a time-varying parameter vector autoregressive model was established to select the scale of US Treasury bond and MBS,US federal benchmark interest rate and systemic financial stress index,and to study the impact effects of US quantitative easing monetary policy under the implementation of quantitative easing policy and different lag periods on Chinese systemic financial pressure.Through the empirical analysis,the following conclusions are obtained.First,the systematic financial stress index fluctuates around a certain level,and is closely related to the fluctuations of our exchange rate and stock price index.The overall trend is opposite to the trend of our securities price index and roughly coupled with the economic trend,which shows that the systematic financial stress index synthesized in this paper can reflect our financial risk more accurately.Second,this paper identifies the state of systemic financial stress index.Those results show that Chinese financial risk state is in low risk state most of the time,and it is easy to change from high risk to low risk,but it is difficult to change from low risk to high risk.Third,the United States can improve the systemic financial pressure of China through the expansion of balance sheet and interest rate reduction measures,but the impact is different in different periods which significantly increased in the short time.In addition,because the expansion of balance sheet needs to affect the stock price and interest rate of China through a series of paths such as the supply of dollars,so the risk transmission has time-lag effect.Finally,based on the above research conclusions,this paper puts forward three suggestions on how to prevent and resolve the systemic financial risks brought about by the quantitative easing policy of the United States.First,pay close attention to the US-China interest rate differentials and formulate monetary policy flexibly and timely.Second,strengthen the supervision of the overall financial system.Third,the Chinese government will combine market forces to reduce fluctuations in exchange rates and interest rates and stabilize fluctuations in the securities market.