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The Effects of Monetary Policy Instruments on Bank Risks in China
Geng Zhongyuan 1 * #,Zhai Xue 2
1.School of Management, Harbin Institute of Technology, 150001
2.School of Management, Harbin Institute of Technology,150001
*Correspondence author
#Submitted by
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Funding: Specialized Research Fund for the Doctoral Program of Higher Education of Ministry of Education of China（No.No.:20092302120060）
Opened online:28 January 2013
Accepted by: none
Citation: Geng Zhongyuan,Zhai Xue.The Effects of Monetary Policy Instruments on Bank Risks in China[OL]. [28 January 2013] http://en.paper.edu.cn/en_releasepaper/content/4517114
 
 
The effects of monetary policy on bank risks has become a hot issue since the 2008 international financial crisis. A panel data regression model is used to examine effects of main monetary policy instruments on commercial bank risks in China from 1998 to 2011.The main findings are as follows. The interest rate has a positive effect on bank risk while the interest rate margin, the reserve requirement ratio and open market operation have a negative effect. Among the three monetary policy instruments, the reserve requirement ratio has the greatest effect on bank risk, the interest rate (the interest rate margin) the second largest and the open market operation the weakest. These findings provide guidance to the monetary authority and regulatory authorities in monetary policy and banking regulation in China.
Keywords:money and banking; monetary policy; interest rate; reserve requirement ratio; open market operation; bank risks.
 
 
 

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