Sun Guofeng, director of the Department of Monetary Policy of the People's Bank of China, wrote that negative interest rate policies are a powerful weapon to deal with severe shrinkable recessions, but the premise is to ensure two spreads such as bank deposits and loans.In practice, China should try to cherish monetary policy space as much as possible, maintain the status of a small number of normal monetary policies as a major economy as a major economy, and avoid serious reduction of a shrinkage.
According to a Reuters report on January 6, Sun Guofeng's article published in Chinese foreign exchange magazines stated that a negative interest rate policy is an important application of loan creation deposit (LCD) theory.The difference in interest difference, that is, the term spread of the bank deposit loan spread and the yield curve to ensure that the interest rate is lower than the marginal return of capital, stimulates the investment of the enterprise, and stimulates the economic growth and the price of price to rise to respond to the reduction of the deflation type.
The effect of negative interest rate policy depends on whether the deposit interest rate can effectively break through the zero limit to ensure the two spreads.Only in this way can we quickly play a role and exit in the short term; otherwise, it may enter the liquidity trap.It should be pointed out that the negative interest rate policy has a negative impact. Therefore, the central bank should maintain normal monetary policy and try to avoid entering zero or negative interest rate interval.
Sun Guofeng pointed out that from the practice of various economies, the negative interest rate achieved a certain effect.However, due to the incomplete transmission of negative policy interest rates to bank deposit interest rates, the deposit interest rate failed to effectively break through the zero limit, and then squeezed the profit of the banking industry.This affects the enthusiasm of bank loans and has significantly restricted the effect of negative interest rates.Therefore, after the implementation of negative interest rate policies for several years, it is difficult to exit, and the framework of returning to normal monetary policy has become far away.
He believes that the long -term implementation of negative interest rates will cause negative impacts, including damage to the interests of deposits, especially low -income people; negative interest rates may also lead to overcapacity and high debt; negative interest rates may also push asset prices; in addition, negative interest rates may be in various economies in various economies.The spillover effect is produced, and the volatility of cross -border capital flow is enlarged.
Chen Yulu, deputy governor of the People's Bank of China, stated at the 2019 China Financial Society's Academic Annual Conference and the Annual Meeting of the China Financial Forum on December 21 that under the new environment of low interest rates has become the norm of global economy, China should cherish and medium -high speeds even moreThe normal monetary policy space that matches the growth is alert to the risk of asset bubbles that may trigger low interest rates. Through price leverage, the decisive role of the market in optimizing the allocation of resource allocation.
