Can Macro Prudential Regulation Suppress the Pro-Cyclical Nature of Bank Credit?——Based on Credit Transmission Channel of Monetary Policy
Based on the panel data of 340 Chinese banks during 2007-2020,this paper incorporates the credit transmis-sion channels of monetary policy into the analysis framework to empirically examine the impact of macro prudential regula-tion on the cyclical characteristics of bank credit and its mechanism.The results show that there is a trade-off mechanism between macro prudential regulation and inhibiting the pro-cyclical nature of bank credit.Although macro prudential regu-lation can suppress endogenous pro-cyclical nature of credit by improving the counter-cyclical nature of bank capital buffer and driving business diversification,it can also reduce the credit transmission efficiency of counter-cyclical mone-tary policy,thereby weakening its effect on inhibiting the overall pro-cyclical nature of credit.The governance effect of macro prudential regulation decreases sequentially in joint-stock banks,urban and rural commercial banks,and state-owned banks,and is relatively weaker during the expansion period of monetary policy while relatively stronger in suppress-ing the pro-cyclical nature of credit loans.
macro prudential regulationpro-cyclical nature of bank creditcredit transmission channel of monetary policytrade-off mechanism
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