1. Center for Economic Research, Shandong University, Jinan 250100, China School of Economics, Central University of Finance and Economics, Beijing 100081, China ; 2. Center for Economic Research, Shandong University, Jinan 250100, China;
This paper builds a micro-behavior model of central bank and financial institutions from the perspective of property-rights. By analyzing the theoretical model and the practice, we conclude that, in the framework of the present financial stabilization policies in China, the central bank’s functions of monetary policy and financial stabilization are enslaved to financial institutions. Thus, central bank independence has been damaged because of the actual property-right relation between the central bank and the financial institutions. The policy implication is to cut off the property-right relation between the central bank and the financial institutions.
