How to distinguish between conventional tools, selective tools and auxiliary tools?

In countries with market economy as the main body, the central bank's monetary policy is mainly through the three "magic weapons" of the central bank, namely, deposit reserve ratio, discount window policy and open market business. These three policy tools are also called conventional monetary policy tools. In fact, the central bank has two other monetary policy tools, namely, selective monetary policy tools and supplementary monetary policy tools. There are many kinds of selective monetary policy tools and supplementary monetary policy tools. Central banks generally choose and use according to their actual conditions and monetary policy objectives.

Different from conventional monetary policy tools, selective monetary policy tools have a local impact on the operation of monetary policy and national economy, but they can also act on the overall goal of monetary policy. Selective monetary policy tool refers to the monetary policy tool adopted by the central bank for the credit of individual departments, enterprises or certain specific purposes. For example, there are securities market credit control, real estate credit control and consumer credit control.

In addition to conventional and selective monetary policy tools, the central bank sometimes uses some supplementary monetary policy tools to directly and indirectly control credit. Direct credit control tools refer to various measures taken by the central bank to directly intervene in the credit creation business of commercial banks according to law, mainly including credit distribution, direct intervention, liquidity ratio, interest rate restrictions and special loans. Indirect credit control means that the central bank, by virtue of its special position in the financial system, guides its credit activities through consultation and publicity with financial institutions to control credit. The main ways are window guidance and moral advice.