Window guidance refers to the central bank's stipulation on the loan focus and loan change quantity of commercial banks according to the industrial market, price change trend and financial market trend, so as to ensure the capital demand of priority development departments in the economy. Later, after a long period of practice, in order to ensure the smooth implementation of monetary policy, this credit control means gradually changed into compulsory means. After World War II, window guidance was once the main tool of the Bank of Japan's monetary policy. In recent years, China has frequently used window guidance and paid attention to coordination with other macro-control policies, which has the characteristics of administrative instructions. The direct purpose of window guidance is to adjust the supply and demand of loan funds.

Window guidance

Thereby affecting the inter-bank market interest rate; The indirect purpose is to match the growth of total credit with economic growth through the interest rate function of interbank lending market. Taking advantage of its central bank position in the financial system and the great dependence of private financial institutions on it, the bank suggested that it automatically comply with the requirements put forward by the Bank of Japan in order to control the total credit. Sometimes, the window guidance also puts forward the loan investment of private financial institutions to ensure the capital demand of key sectors in the economy and achieve the purpose of adjusting the industrial structure.