Global Financial Cycles and Financial System Resilience:Empirical Evidence Based on International Perspectives
Accelerating the construction of a resilient modern financial system is an important support and security guarantee to promote China's high-quality financial development and help the realization of the goal of a financial power.Based on the typical facts of the financial system resilience of 46 major economies in the world in 2007-2021,the article empirically exam-ines the spillover effect of the global financial cycle on the financial system resilience and its transmission mechanism with ex-ternal financial shocks as the entry point.The study finds that(1)the global financial cycle has a significant negative spillover effect on financial system resilience,and this conclusion still holds after dealing with endogeneity issues and conducting a se-ries of robustness tests;(2)the mechanism test finds that the global financial cycle can negatively affect financial system resil-ience through the international commodity price channel,the international capital liquidity channel and the investor risk sen-timent contagion channel;(3)The results of the heterogeneity analysis suggest that this negative spillover effect is stronger in advanced economies,those with high financial openness and those with a fixed exchange rate regime;(4)The empirical re-sults after further incorporating macroprudential policies into the research framework show that in the risky upturn phase of the global financial cycle,strict macroprudential policy interventions can effectively inhibit the negative impact of the global financial cycle on the resilience of the financial system.The conclusions of the study provide a theoretical basis and empirical evidence for China to effectively prevent and resolve imported financial risks under the new situation,and also provide useful policy insights for accelerating the construction of a financial power and building a modern financial system with Chinese characteristics.
Financial System ResilienceGlobal Financial CycleMacroprudential PolicyFinancial Power
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