Abstract
Chinese banks have gradually expanded their financial services into overseas financial services and financial trade transactions. The financial services system is becoming more and more humanized and intelligent with the global economy's rapid development and progress. It improves the quality of banks' financial services and plays a vital role in its financial system construction and financial product innovation. As an internal driving force for the development of the financial industry, financial innovation has a vast and extensive impact on the economy. Because of the importance of monetary policy on national macroeconomic regulation and control, it is of great practical significance to study the impact of financial innovation on monetary policy effectiveness. This paper has conducted an in-depth analysis of the core concepts of internet finance, and suggestions and policy implications are given to improve China's monetary policy's effectiveness.Keywords: financial products, service innovation, monetary policy, effectiveness analysisJEL Classifications: G29, G14DOI: https://doi.org/10.32479/ijefi.11007
Highlights
Chinese scholars believe that the rapid entry of foreign commercial banks into the Chinese economy has put tremendous pressure on China’s commercial banks and brought new challenges and innovation to the Chinese financial industry’s development since China’s accession to the World Trade Organization (WTO)
As the main institution of financial services, the core point of financial system innovation lies in the establishment of a healthy and perfect open platform for financial innovation for the Chinese economic development, active use of high-level talents’ innovation awareness and innovation capabilities, and the establishment of financial system technology
Financial innovation reflects the rapid development of the market economy, thereby accelerating market prices’ sensitivity to information
Summary
Chinese scholars believe that the rapid entry of foreign commercial banks into the Chinese economy has put tremendous pressure on China’s commercial banks and brought new challenges and innovation to the Chinese financial industry’s development since China’s accession to the World Trade Organization (WTO). Through the continuous development of the world economy, every financial innovation will substantially impact the monetary policy’s effectiveness. Internet finance, which integrates Internet technologies and financial activities, plays an important role in four major areas: payment and settlement, resource allocation, risk management, and networking channels It can effectively reduce the transaction costs and the degree of information asymmetry in financial activities. The effectiveness of monetary policy mainly reflects four aspects: promoting innovation in bank finance, ensuring the stability of employment forms throughout the year, promoting sustainable economic growth, and realizing precise controllability of money market interest rates. The bank’s financial service model’s innovation mainly requires mobile internet technology to realize the online service and management model of traditional financial services. The bank’s financial service solution’s innovation is a complex service system solution that requires continuous improvement of the service provider’s quality and ability (Xie et al, 2016)
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