Monetary Policy Instruments and Bank Risks in China

2013 ◽  
Vol 4 (2) ◽  
pp. 57-71
Author(s):  
Zhongyuan Geng ◽  
Xue Zhai
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Policy Instruments ◽  
Bank Risk ◽  
Open Market ◽  
Reserve Requirement ◽  
Market Operation ◽  
Open Market Operation ◽  
The Interest Rate ◽  
Bank Risks

The authors use a panel data regression model to examine the effects of main monetary policy instruments on commercial bank risks in China from 1998 to 2011. 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. Their findings provide guidance to the monetary authority and regulatory authorities in monetary policy and banking regulation in China.

Monetary Policy Instruments and Bank Risks in China

2014 ◽  
pp. 518-531
Author(s):  
Zhongyuan Geng ◽  
Xue Zhai
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Policy Instruments ◽  
Bank Risk ◽  
Open Market ◽  
Reserve Requirement ◽  
Market Operation ◽  
Open Market Operation ◽  
The Interest Rate ◽  
Bank Risks

The authors use a panel data regression model to examine the effects of main monetary policy instruments on commercial bank risks in China from 1998 to 2011. 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. Their findings provide guidance to the monetary authority and regulatory authorities in monetary policy and banking regulation in China.

scholarly journals ANALISIS KETERKAITAN INSTRUMEN KEBIJAKAN MONETER, DEFISIT ANGGARAN, DAN NERACA PEMBAYARAN INDONESIA TAHUN 2002 - 2017

2020 ◽  
Vol 2 (2) ◽  
pp. 36
Author(s):  
Orlandio Jeremy
Keyword(s):  
Monetary Policy ◽  
Money Supply ◽  
Policy Instruments ◽  
Secondary Data ◽  
Balance Of Payments ◽  
Open Market ◽  
Budget Deficits ◽  
Reserve Requirement ◽  
Market Operation ◽  
Open Market Operation

This study aims to analye the linkages of monetary policy instruments, budget deficit and balance of payments with VECM method. This study used secondary data from 2002 quarter I to 2017 quarter IV.            The result found one-way interaction between open market operation with Indonesian balance of payments. Money supply has two-way causality relationship with budget deficits and minimum reserve requirement. The exogenous variable which are BI rate and open market operation affected Indonesian’s balance of payments with  positive correlation, while the minimum reserve requierment significantly affect Indonesian’s balance of payments with negative correlation. Impulse response found shock of money supply respond to balance of payments positive in the fourth period.This result show that Indonesia’s balance of payments is a monetary phenomenon. So monetary policy instruments BI rate, minimum reserve requirement and open market operation can be used to maintain the stability of Indonesia’s balance of payment.

scholarly journals Monetary Policy Its Instruments and Convergence of Its Objectives: Case of Angola 2005/2017

2019 ◽  
Vol 5 (2) ◽  
pp. 161
Author(s):  
Antonio, Pitshu Massaka
Keyword(s):  
Monetary Policy ◽  
Policy Instruments ◽  
Multiple Linear Regression Model ◽  
Economic Thought ◽  
Policy Framework ◽  
Open Market ◽  
New Paradigm ◽  
Keynesian Model ◽  
Market Operation ◽  
Open Market Operation

<p><em>This paper proposes a new paradigm for the analysis of monetary policy, and presents the monetary policy framework in Angola which includes the policy instruments, and implementation mechanism the way between instrument and objective.<strong> </strong>To study the Monetary Policy instruments in Angola based on a multiple linear regression model. Before the model was conceived an analogy was made about the politics and instruments of monetary policy from the classical Keynesian model in the matter, but also less important also to analyze the concrete objective of monetary policy if the authors agree connected with those currents of economic thought. For the estimation of the equation for the monetary aggregate M2 that represents the money supply by the Central Bank in Angola The author applied the current implementation and the existing theories to display the Angola monetary tools such as basic interest rate for monetary policy orientation (tbna), open market operation, Lending Facility, coefficient of required reserve, net international reserves, and the Gross Domestic Product, the reference oil price to brent. Most of the variables present the expected results.</em></p>

scholarly journals KETERKAITAN INSTRUMEN KEBIJAKAN MONETER DENGAN NERACA PEMBAYARAN DI INDONESIA

2020 ◽  
Vol 3 (1) ◽  
Author(s):  
Indra Maipita
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Policy Instruments ◽  
Balance Of Payments ◽  
Open Market ◽  
Close Link ◽  
Macroeconomic Variables ◽  
Policy Variable ◽  
Market Operation ◽  
Open Market Operation

This study aims to determine the monetary policy variable linkages with Indonesia's balance of payments. Using svar and IRF analysis found that the level of α = 0.05, variable monetary policy instruments such as open market operation (OPT), the minimum reserve requirement (GWM), and the discount rate (rDisk) has a significant relationship with the variable balance of payments (BOP) . In fact, all the macroeconomic variables also significantly affect the balance of payments variables, except the variable domestic interest rates. This means that there is a close link between monetary policy instruments with the balance of payments in Indonesia in the period of the study.

scholarly journals MONETARY POLICY IN AN ISLAMIC ECONOMICS

2021 ◽  
Vol 9 (5) ◽  
pp. 315-326
Author(s):  
Bismi Khalidin
Keyword(s):  
Monetary Policy ◽  
Discount Rate ◽  
General Concept ◽  
Economic Systems ◽  
Open Market ◽  
Holy Quran ◽  
Market Operation ◽  
The Holy Quran ◽  
Open Market Operation ◽  
The Stability

The primary aim of this paper is to elucidate the general concept of monetary policy under Islamic Economics. Not only does the stability of but also the growth of the economy in a country strongly depends upon monetary policy implemented. Such the phenomenon also prevails in Islamic Economics in which the term is also ruled by the Holy Quran and the Hadith of the Prophet. Moreover, the Prophet issued some regulations regarding monetary, such as to adopt Dinars and as the Islamic currencies. It is noted that, however, the thing distinguishing between Islamic Economics and other economic systems the variable of interest or usury, where either the Holy Quran or the Hadith clearly states that it is banned. Due to using interest as the yardstick, the conventional monetary instruments such as Open Market Operation, Discount Rate and the likes are not considered as the monetary instruments under Islamic Economics. Therefore, Instead of interest, Islamic Economics adopts Profit Loss Sharing (PLS) system, regarded as the important part of monetary policy. Moreover, Islamic Economics has also its specific monetary standard and instruments, which are far from interest or variables, such as certificates and others.

scholarly journals Excess Real Interest Rates and the Inflation Targeting Regime in Brazil: Monetary Policy Ineffectiveness and Rentiers’ Interests

2018 ◽  
Vol 5 (6) ◽  
pp. 84
Author(s):  
Fernando Ferrari Filho ◽  
Marcelo Milan
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Negative Impact ◽  
Policy Instruments ◽  
Output Growth ◽  
International Standards ◽  
Real Interest Rates ◽  
The Interest Rate

Brazil has had, since the middle 1990s, one of the highest real interest rates in the world, yet not one of the lowest inflation rates. By the end of that decade, an inflation targeting regime (ITR) was introduced. Real interest rates have remained extremely high for international standards, while macroeconomic performance has been dismal on the same grounds. This article argues that these results can be explained by, among others reasons, pressures from the rentiers to frame monetary policy in a way to sustain very high interest earnings in a context where inflation is not very sensitive to monetary policy instruments. Under the ITR, the interest rate seems to have been kept above what would be required to maintain low inflation under normal conditions (even if one assumes a demand-pull inflation, which is not necessarily the case), with a potentially negative impact on growth and employment. This is interpreted as an indicator of monetary policy ineffectiveness. On the empirical ground, this article compares interest rate, inflation, unemployment, and real output growth for Brazil with both ITR and non-ITR countries selected by judgment sampling.

scholarly journals Assessing the Role of Money versus Interest Rate in Pakistan

2020 ◽  
Vol 59 (1) ◽  
pp. 101-114
Author(s):  
Zafar Hayat ◽  
Muhammad Nadim Hanif
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Relative Effectiveness ◽  
Policy Instruments ◽  
Jel Classification ◽  
Short Term ◽  
Price Puzzle ◽  
The Interest Rate ◽  
The Impact

We have empirically examined the role of monetary aggregate(s) vis-à-vis short-term interest rate as monetary policy instruments, and the impact of State Bank of Pakistan’s transformation into the latter on their relative effectiveness in terms of inflation in Pakistan. Using indicators of ‘persistent changes’ in the underlying behaviours of variables of interest, we found that broad money consistently explains inflation in (i) monetary (ii) transitory and (iii) interest rate regimes. Though its role has receded while moving from the transition to the interest rate regime, the interest rate instrument seems to be positively related to inflation, a phenomenon commonly known as price puzzle. In light of these findings, we recommend that the role of money should not be completely de-emphasised. JEL Classification: E31, E52. Keywords: Monetary Policy Instruments, Price Puzzle, ARDL, Pakistan

Monetary Policy and Expectations: Market-Control Techniques and the Bank of England, 1925–1931

1995 ◽  
Vol 55 (3) ◽  
pp. 612-636 ◽  
Author(s):  
John R. Garrett
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Open Market ◽  
Market Control ◽  
Market Portfolio ◽  
Bank Of England ◽  
Market Operation ◽  
Classical Models ◽  
Open Market Operation ◽  
Central Bankers

The Bank of England depleted its open-market portfolio by secretly sterilizing large gold inflows. Thereafter interest rates were influenced by manipulating reported gold flows. Expectations manipulation as a monetary policy channel is modeled and estimated. A gold flow falsification was over two-thirds as effective as an open-market operation. These results contradict accepted new classical models and suggest that credibility benefits from new classical policy are small, despite current popularity among central bankers. The episode supports Peter Temin’s view of interwar central bankers as nonstabilizers and enforcers of a dysfunctional classical orthodoxy.

scholarly journals Chinese Private Lending Risk and Monetary Policy Operating

2016 ◽  
Vol 2 (2) ◽  
pp. 34 ◽  
Author(s):  
Guangning Tian ◽  
Kaiyan Li
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Financial Risk ◽  
Risk Control ◽  
Open Market ◽  
Credit Policy ◽  
Empirical Results ◽  
Market Operation ◽  
Private Lending ◽  
Open Market Operation

The private lending risk was more likely expressed as the forms of various funding raising disputes, which originated from the borrowers’ solvency problems. Whether the change of monetary policy had an impact on the civil financial risk and how much of the influence were worth of consideration. Based on the analysis of how monetary policy operated on the private lending risk, we took some key data, such as the amount, the involved number and the interest rates deprived from the private lending disputes cases happened in our country from 2003 to 2014, to construct the model between the index of private lending risk and the monetary policy variables. Also we need to explore the inner relationship between them. The empirical results show that the monetary policy tools do have an impact on the private lending risk to some different degree. More specifically, the implication for the monetary policy operations is that we should not use the deposit reserve policy and the credit policy more frequently, while the rediscount policy and the open market operation have more advantage on the balance of macroeconomic regulation and the private lending risk control.

Inflation Dynamics, Globalization and Monetary Policy: Empirical Evidence from Selected South and Southeast Asian Countries

2020 ◽  
Vol 16 ◽  
Author(s):  
Arshi Shahid ◽  
◽  
Shabib Syed ◽  
Hafiz Ahmad
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Policy Instruments ◽  
Output Gap ◽  
Domestic Output ◽  
Panel Data Estimation ◽  
Dynamic Heterogeneous Panel ◽  
The Interest Rate ◽  
Nominal Anchor ◽  
The Impact

The present study investigated the impact of monetary policy and globalization on inflation. The study utilized an updated measure of globalization along with two other dimensions i.e., de facto and de jure measure of globalization to examine the nature of the globalization-inflation relationship. It measures the impact of monetary policy variables on inflation, ignoring random shocks as these are considered minor fractions for the inconsistency of the policy instruments. The study also used the Hodrick Prescott filter to calculate the domestic output gap to assess the notion that the changes in the domestic output gap are still relevant to inflation variations in the presence of globalization. Structural modeling of dynamic heterogeneous panel data estimation technique, which accounts for endogeneity and serial correlation issues has also been employed. The results of the study confirm that both global and domestic factors have significant and descriptive power for domestic inflation. Furthermore, the interest rate is found to be a major nominal anchor to affect inflation. The results of panel causality showed that there exists bidirectional causality from inflation to interest rate, while mixed results were found for analyzing monetary aggregates, exchange rate, globalization, and domestic output gap relationships.

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