Abstract
The central bank's financial stability communication has become an important monetary policy tool. This paper selects the financial stability reports and Oral communication of the People's Bank of China from 2010 to 2020 as the original text, constructs the emotional dictionary of China's financial stability communication, analyzes the emotional content of the central bank's financial stability communication, and constructs the central bank's financial stability communication index. Equipped with the index, this paper empirically tests the effect of central bank's financial stability communication in Chinese stock market. The results show that: (1) written communication in the form of Financial Stability Report can effectively guide the market trend to the direction expected by the central bank, while oral communication has no significant effect; (2) Written communication can reduce the volatility of the stock market, while oral communication may cause the volatility of the stock market. Further, this paper discusses the mechanism of the central bank's financial stability communication affecting the financial market. The results show that the central bank's financial stability communication mainly plays a role in stabilizing the market through the coordination channel, while the signaling channel plays a relatively weak role. The research results of this paper are of great significance for improving the communication mode of the central bank's financial stability and thus promoting the stability of the financial market.
Published Version
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