The Resource China's evolving reserve requirements, Guonan Ma, Yan Xiandong, Liu Xi

China's evolving reserve requirements, Guonan Ma, Yan Xiandong, Liu Xi

Label
China's evolving reserve requirements
Title
China's evolving reserve requirements
Statement of responsibility
Guonan Ma, Yan Xiandong, Liu Xi
Creator
Contributor
Subject
Language
eng
Summary
This paper examines the evolving role of reserve requirements as a policy tool in China. Since 2007, the Chinese central bank (PBC) has relied more on this tool to withdraw domestic liquidity surpluses, as a cheaper substitute for open-market operation instruments in this period of rapid FX accumulation. China's reserve requirement system has also become more complex and been used to address a range of other policy objectives, not least being macroeconomic management, financial stability and credit policy. The preference for using reserve requirements reflects the size of China's FX sterilisation task and the associated cost considerations, a quantity-oriented monetary policy framework challenged to reconcile policy dilemmas and tactical considerations. The PBC often finds it easier to reach consensus over reserve requirement decisions than interest rate decisions and enjoys greater discretion in applying this tool. The monetary effects of reserve requirements need to be explored in conjunction with other policy actions and not in isolation. Depending on the policy mix, higher reserve requirements tend to signal a tightening bias, to squeeze excess reserves of banks, to push market interest rates higher, and to help widen net interest spreads, thus tightening domestic monetary conditions. There are, however, costs to using this policy tool, as it imposes a tax burden on Chinese banks that in turn appear to have passed a significant portion of this cost onto their customers, mostly depositors and SMEs. However, the pass-through onto bank customers appears to be partial
Member of
Cataloging source
NDD
http://library.link/vocab/creatorName
Ma, Guonan
Index
no index present
Literary form
non fiction
http://library.link/vocab/relatedWorkOrContributorName
  • Xiandong, Yan
  • Xi, Liu
  • Bank for International Settlements
Series statement
BIS working papers,
Series volume
no. 360
http://library.link/vocab/subjectName
  • Banks and banking, Central
  • Monetary policy
  • China
  • China
  • Global Financial Crisis, 2008-2009
Label
China's evolving reserve requirements, Guonan Ma, Yan Xiandong, Liu Xi
Instantiates
Publication
Bibliography note
Includes bibliographic references
Control code
ocn771016523
Dimensions
30 cm
Extent
III, 30 p.
Other physical details
ill.
System control number
(OCoLC)771016523
Label
China's evolving reserve requirements, Guonan Ma, Yan Xiandong, Liu Xi
Publication
Bibliography note
Includes bibliographic references
Control code
ocn771016523
Dimensions
30 cm
Extent
III, 30 p.
Other physical details
ill.
System control number
(OCoLC)771016523

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