Interest Rate Liberalization, Monetary Policy and Bank Risk-taking

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Abstract By constructing the weighted average index which reflects the liberalization of the interest rate in the money market, the bond market, the shadow banking market and the bank deposit and loan market, this paper combines the panel data of 115 commercial banks in China from 1996 to 2014 with the system GMM model to test the relationship between monetary policy and the bank risk-taking in the liberalization process of interest rate. The empirical results show that with the gradual rise of the level of interest rate liberalization, the loose (tight) monetary policy stimulates(constraints) the risk-taking behavior of commercial banks. But under the dual impact of “liquidity effect” and “price effect”, the impact of monetary policy on bank risk-taking behavior is gradually weakened. It is of great practical significance to improve the institutional mechanism of interest rate liberalization to improve the macro-prudential management framework of China’s financial market.

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	LIU Sheng-Fu
	YANG Xin-Zhe
	HAN Yong

Key words： Interest Rate Liberalization Monetary Policy Bank Risk-taking Macro-Prudential Management Interest Rate Liberalization Monetary Policy Bank Risk-taking Macro-Prudential Management Interest Rate Liberalization Monetary Policy Bank Risk-taking Macro-Prudential Management

Received: 2017-10-15

ZTFLH:

F832.3

Cite this article:

LIU Sheng-Fu,YANG Xin-Zhe,HAN Yong. Interest Rate Liberalization, Monetary Policy and Bank Risk-taking. Economic Survey, 2018, 35(4): 0150.

URL:

http://www.jjjw.org.cn/CN/Y2018/V35/I4/0150