(1) is fast and powerful;

(2) The role is neutral, that is, changing the statutory deposit reserve ratio has the same impact on all banks and financial institutions;

(3) Under certain conditions, other monetary policy tools can play an irreplaceable role;

(4) The deposit reserve system enhances the financial strength of the central bank and its ability to supervise financial institutions, which can create favorable conditions for the smooth operation of other monetary policy tools.

2. The deposit reserve system also has some shortcomings:

(1) The effect is too violent. Small changes in the statutory deposit reserve ratio will cause large fluctuations in the statutory reserve, which will have a strong impact on the economy;

(2) Frequent changes in the reserve ratio will bring many uncertainties to banks and increase the difficulty of bank liquidity management, so it is easy to be opposed by commercial banks and financial institutions;

(3) Restricted by the central bank's purpose of maintaining the banking system-it is easy to reduce the statutory deposit reserve ratio, but difficult to increase the statutory deposit reserve ratio.

Most people think that the central bank should abandon the use of the deposit reserve system as a conventional monetary policy tool; From the specific practical operation, the statutory deposit reserve ratio in most countries is gradually "fixed" and "lowered".

legal ground

Law of the People's Bank of China of the People's Republic of China

Article 23 In order to implement monetary policy, the People's Bank of China may use the following monetary policy tools: (1) requiring banking financial institutions to deposit reserves in a prescribed proportion; (2) Determining the benchmark interest rate of the central bank; (3) handling rediscount for banking financial institutions that have opened accounts with the People's Bank of China; (4) Providing loans to commercial banks; (5) buying and selling treasury bonds, other government bonds, financial bonds and foreign exchange in the open market; (6) Other monetary policy instruments determined by the State Council. The People's Bank of China may prescribe specific conditions and procedures when applying the monetary policy tools listed in the preceding paragraph for the implementation of monetary policy.