Research On The Influencing Factors Of Intermediary Business Innovation Of Commercial Banks In China Under The Background Of Interest Rate Marketization

The global financial crisis has brought a big change to the financial development pattern. As a result, the development trend of our domestic economics, especially the situation of the banking development, has undergone a change. From a certain point of view, commercial banks get effective yield through steady interest rate spreads - this has already formed a certain scale of monopoly to some extent and thus subsequently brought negative effects such as misallocation of resources, mispricing etc.. which also weakened the interest’s role as the economic lever. With the development of the financial system reform, interest rate marketization reform becomes an important part. Banks’interest rate spreads will be narrowed down as a result of interest rate marketization, which will bring an impact on the traditional revenue model of commercial banks as well as operational risks. In order to gain more development opportunities, commercial banks have to seek diverse and innovative way to develop intermediary business, and at meantime continue with the development of traditional business. Only increasing the intermediary business revenue can avoid business risks, especially interest rate market risk caused by price competition, to allow commercial banks to gain a breakthrough of new profit growth.After marketization of interest rate, China’s commercial banks rushed to develop intermediary business innovation, which at a certain extent, dispersed the bank operation risks. However, their own business operational risks of intermediary business cannot be ignored. The harmony of the selected intermediary business with the firm itself is the question that commercial banks need to consider in the development of innovative intermediate business. Based on above, this paper studies under interest rate marketization, the impact on the innovation of commercial banks intermediate business in China to commercial banks performance and risk. This paper will also provide the ideas and suggestions about the innovation of China’s commercial banks after interest rate marketization. The main contents of this paper are as follows:Chapter 1:Introduction. It includes: the introduction of research background, purpose of research, research contents and research techniques; Chapter 2:the Relative theory in interest rate marketization and the intermediate business innovation of commercial banks. It introduces the classical theory and research progress of interest rate marketization, the classical theory and research progress of the innovation of commercial banks’ intermediate business and the related research on the innovation of commercial banks’ intermediate business in China; Chapter 3:the current situation of the innovation of commercial banks in China under interest rate marketization. This chapter first introduces the progress of interest rate marketization in China, and then introduces the main phase, the achievement and existing problem of the innovation of commercial banks’ intermediate business in China, last to analyze interest rate marketization’s impact on the innovation of commercial banks’ intermediate business in China; Chapter 4:empirical research on Intermediary business innovation of commercial banks operating risk under interest rate marketization. This chapter focuses on the Empirical Analysis of the Intermediary Business Innovation and the Banks’ operating risk through an in-Depth analysis of relevant data.Chapter 5 provided an empirical study between innovation of banks intermediate business and bank operational performance on the basis of interest rate marketization. The major study hypothesis has been listed according to the theoretical analysis. To analyze whether the innovation of banks intermediate business could put effect on bank operational performance, specific models has been formulated to conduct an empirical analysis as well as comparing the results of the empirical analysis. And the hypothesis mentioned in this research has been testified through the empirical study. In Chapter 6, the innovative strategies of banks intermediate business under interest rate marketization was given and the conclusion and recommendations were presented. In the conclusion and recommendation part, it summarized the research progress of intermediate business theories indicating the future direction. It posted that in the future, banks intermediate business innovation in China will gradually improve and will affect the stability of economy development in a larger proportion. It also indirectly depicted the necessity of innovative finance and the significance of it both in the past and at presence. Therefore, there should be more attention to this subject.The main conclusions can be listed as follows. Firstly, after interest rate marketization, the ratedifference of commercial bank was gradually reduced and then commercial banks began to develop intermediate business to seek for new profit mode. However, in the objective condition of continuous proceeding of interest rate marketization, net interest margin showed a prominent positive influence on operational risks of commercial banks. The competition among commercial banks led to reduced rate difference causing decreased bank operational performance. It also reflected that in the process of interest rate marketization, the price battle among commercial banks was not favorable for the control of banks operational risks. Secondly, after interest rate marketization, commercial banks intermediate business innovation can not only improve the performance of commercial banks, but also do good to the control of operational risks. This action alleviated the price competition among commercial banks. Thirdly, the intermediate business has obviously different influence on listed commercial banks and unlisted ones. The reasons may lie in the market more accepted relevant service of listed commercial banks as a result of the more normative operation activities and maturity in intermediate business which improved the security of listed commercial banks operation in some degree. By contrast, unlisted commercial banks showed a lack of enthusiasm of developing intermediate business leading to reduced security of their operation.