monetary policy
1. Reduce interest rates
In order to solve the risk of economic recession caused by the subprime mortgage crisis, on September 8, 2007, the Federal Reserve decided to reduce the target interest rate of federal funds, which has been maintained for 14 months, from 5.25% to 4.75%, which is the first time that the Federal Reserve has lowered interest rates since 2003. With the spread of the subprime mortgage crisis, the Federal Reserve cut interest rates continuously. By April 30th, 2008, the Federal Reserve cut the federal funds rate to 2% for seven consecutive times. However, the reduction of interest rate restored the liquidity of financial market, that is, the value of financial assets, while the capital outflow increased, the dollar depreciated against foreign currencies, and the price in the real economy expanded. In the market, with the voice of "cutting interest rates to the end", the Federal Reserve quietly started the conversion of monetary policy tools.
2. Restart the discount window
The discount window is a tool for the Federal Reserve to issue discount loans to commercial banks. The Federal Reserve can adjust the loan cost of commercial banks by changing the discount rate, but whether to obtain loans through the discount window and the amount of loans depend on commercial banks, and the Federal Reserve is in a relatively passive position. In order to prevent the credit market crisis from worsening, the Federal Reserve announced on August 17, 2007 that the discount rate would be lowered by 50 basis points, that is, from 6.25% to 5.75%. Previously, the Fed kept pace with the adjustment of the discount rate and the federal funds rate, and generally maintained a spread of 65,438+000 basis points. After this unilateral reduction in the discount rate, the spread between them narrowed to 50 basis points. Although the Federal Reserve lowered the discount rate to 2.25% several times after the credit crisis, many commercial banks are afraid that this will cause investors to worry about their health because of the "notification effect" of rediscount on the market, so most of them are reluctant to borrow directly from the Federal Reserve through discount.
3. Short-term loan auction tools came into being.
From June 5438 to February 2007, the Federal Reserve began to use the short-term loan auction tool as a new operating tool to provide funds to commercial banks facing insufficient liquidity. Compared with the open market business, more financial institutions can participate in short-term loan auction tools, and there are relatively more types of bonds as loan guarantees, which is conducive to providing liquidity for institutions more efficiently; Compared with the discount window, because the Fed does not disclose the names of institutions that use short-term loan auction tools, it better protects the business secrets of participating institutions, and the auction interest rate of short-term loans is slightly lower than the discount interest rate, so it is welcomed by deposit institutions in urgent need of short-term funds.
(2) Fiscal policy
On October 24th, 2008/kloc-0, the US House of Representatives announced the economic stimulus plan proposed by the US government with a total cost of $654.38+050 billion. According to the US fiscal stimulus policy announced by the US Congress, every American worker can enjoy a tax reduction of $300 per person, and families with many children can enjoy a tax reduction of up to $65,438+$0.200. The plan also includes a business tax reduction plan, which allows enterprises to prepay 50% of capital expenditure and have a longer time to make up for previous losses, and the period is increased from two years to five years. At present, the interest rate in the United States is at a low level, and the elasticity of money demand to interest rates is large, which is prone to liquidity traps. At this time, the effect of adopting expansionary fiscal policy to stimulate the economy is more obvious than that of loose monetary policy. Tax reduction can be used as an important means to stimulate effective social demand and increase people's disposable income. In addition, tax cuts can ease the pressure of inflation. Therefore, for the current economic situation in the United States, expanding fiscal policy to stimulate economic development may be a good strategy to deal with the crisis. Federal Reserve Chairman Ben Bernanke also said that the current deficit fiscal policy is more effective for the US economy.
With the continuous innovation of financial derivatives and diversification of investment tools, the risks are getting bigger and bigger, and it is more and more difficult to control. Even the United States, a world economic power, is hard to resist, and the lag of financial supervision has snowballed the crisis. This is undoubtedly a great challenge for China, which is preparing for the further development of the capital market. Therefore, China should learn from the experience of foreign countries in dealing with the crisis, strengthen the supervision of financial markets, nip in the bud, and make China's capital market develop more healthily and stably.