Chinese Private Lending Risk and Monetary Policy Operating

Abstract

The private lending risk was more likely expressed as the forms of various funding raising disputes, which originated from the borrowers’ solvency problems. Whether the change of monetary policy had an impact on the civil financial risk and how much of the influence were worth of consideration. Based on the analysis of how monetary policy operated on the private lending risk, we took some key data, such as the amount, the involved number and the interest rates deprived from the private lending disputes cases happened in our country from 2003 to 2014, to construct the model between the index of private lending risk and the monetary policy variables. Also we need to explore the inner relationship between them. The empirical results show that the monetary policy tools do have an impact on the private lending risk to some different degree. More specifically, the implication for the monetary policy operations is that we should not use the deposit reserve policy and the credit policy more frequently, while the rediscount policy and the open market operation have more advantage on the balance of macroeconomic regulation and the private lending risk control.