Probe - Accounting, Auditing and Taxation

Monetary policy, interbank network mechanisms, and commercial bank risk-taking amplification effect

Jiayun You

School of Finance, Harbin University of Commerce

DOI: https://doi.org/10.59429/paat.v7i1.9440

Keywords: Monetary policy; Related network; Risk-taking of commercial banks

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Abstract

Studying the impact of monetary policy on the risk-taking of commercial banks and how interbank networks play a role in the influence of monetary policy on commercial bank risk-taking is of great significance, which can provide reference for the implementation of monetary policy and the improvement of risk management capabilities of commercial banks in China. This article proposes the following countermeasures and suggestions to both commercial banks and the central bank: the Chinese government should pay attention to the phenomenon of increased risk contagion caused by loose monetary policy, especially the amplification effect of interbank network mechanisms, and avoid underestimating the role of monetary policy in promoting the level of bank risk contagion; We should focus on banks with high correlation, and commercial banks need to pay attention to the risk superposition effect caused by micro level correlation when preventing their own risk contagion, in order to reduce the risk contagion of related banks to themselves; Regulatory authorities should implement differentiated regulatory measures for different banks to enhance regulatory effectiveness and balance financial stability and efficiency.

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