The Research Of Commercial Bank Interest Rate Commodity Operation And Management

With the deep boost of our Socialist Market Economy, the pace of the reform of RMB interest rate liberalization (IRL) is been accelerated gradually. What does the IRL really mean is that the interest rate the operation fund price of our commercial banks is not unalterable again, it will be fluctuated according to the supply and demand situation in the fund market on the basis of benchmark.The fluctuation of the interest rate increase the operation risk of commercial banks, it will affect the operation scale and profit, comprehensive competition of commercial banks deeply. Therefore, the commercial banks should face the reality and change the concept in order to transmit the operation of interest rate from instrumental operation into commercial operation.The interest rate commodity (IRC) bears the characteristic of circulation and transfer, it also include many products contain option and related to fund. These options comprise of repurchase, redeem, transfer, interest rate form change, interest rate executive behavior choose and principal size alteration etc except for the fund option. The IRC is evolved from interest rate products, it is circulated interest rate product with the exchange attendance of commercial banks, and marked the amount, term, criterion, right and obligation of the two sides of dealing under the condition of IRL.The IRC enjoy some specialty of real commodity, for example it can be exchanged and circulated, it also has use value and value, but the use of IRC is not for consumption, is to avoid risk and gain scale merit. The IRC also bears some difference between real commodity, it is capital commodity and provide physical and technical condition to create surplus value. It is the risk transformation commodity, the function of derivative IRC is to keep away the interest rate risk of commercial banks and the asset and liability of clients. Moreover, the fund-based IRC can transfer or diverse the risk bring by the project and owner. The price of IRC is the axes to embody the profit and risk. The provider and demander of IRC are to deal with the yield of IRC. Both the two sides want to gain the maximum yield and minimum risk.There are many sorts and forms of IRC. The yield of IRC act as the unite value orprice, it can keep away the IRC from the influences of principal, term, risk and market, especially the value differentia according to the vary options which contained by the IRC. And thus establish a uniform platform to the analysis and research of IRC, and a unite criterion for the provider and investor of IRC to ascertain and estimate the cost and profit of IRC.IRC market is the summation of IRC exchange relationship. It can be divided into tier-one market and tier-two market by its development course. According to the time span of the exchange completion, there are spot IRC market and forward IRC market. From the point of commercial banks, it can be divided into liability-based market of IRC, asset-based IRC market and asset & liability IRC market depend on the different attendee. Measured by the inclusive options, there are single-option IRC market and multi-option IRC market. In term of payment models, from the provider's point of view, it can be divided into one-off payment of principal and interest on maturity IRC market and amortization of principal and interest IRC market. On the side of demanders, there are one-off payment of principal and interest at the beginning period IRC market and increase and decrease principal on stages IRC market. The increase and decrease of principal can be both orderly and disorderly.The role of the commercial banks in market is mainly the provider, because of the need of fund. The major factors that affect the supply of IRC of commercial banks are: the price of IRC, the development scale and target of commercial banks, the asset and liability structure of commercial banks and the volatility of market interest rate.The unification of liquidity, security and profitability is the operation principle of commercial banks. However, the three characteristics are opposed to each other sometimes. The development of commercial banks has experienced three stages. They are asset management, liability management and asset & liability comprehensive management enclose the unification. But it had not been successfully unified due to the different operation circumstance and operation tools used to balance the three characteristics. While the IRC has the advantages of more flexible adjustment and price, more comprehensive risk control, so it's the choice of th development and the first operation principle of commercial banks.The development process of commercial banks is the expanding of the business scale and the improvement of the quality of asset & liability. It makes the separate extent of ownership and use of fund deeper. It is also the course of the separation of the amount, term, profit, risk of fund. In the asset & liability business of commercial banks, the ownership and use of fund are from integrated till separated, and finally integrated.During this course, it will experience different periods, stages, process, profit and encounter variable risks. Operation IRC by commercial banks can not only make the asset & liability flow in the market, but also measure the risk generated from the operation of asset & liability. It can be endowed many rights to avoid risk, facilitate the separation of the amount, term, profit, risk of fund. In this way, the channels of the fund source of commercial banks had been expanded as well as the risk had been decreased, the profit had been improved. This is the second principle of the operation of commercial banks, which is the separation principle of the amount, term, profit, risk of fund.The third principle is to combine the operation of IRC with the macro-manipulation. The two sides are effected and influenced each other, the supply volume of currency, investment scale of the whole society and the increase of national economy are affected by the operation of IRC of commercial banks, while the benchmark and the amount of market fund is decided by the macro-manipulation of government which form a restriction of the operation of IRC. Consequently, not only the influence of the operation of IRC but also the infection of the execution of policy should be considered by macro-manipulation. Commercial banks should analyze the changing direction of macro-policy and grasp the fluctuation trends of benchmark and market rate.The operation of commercial banks should firstly face the clients, and then discover, create, fulfill the requirements of clients. Moreover, the options contained in the IRC are the reflection of the requirements of clients. Therefore, the innovative course of IRC of commercial banks is also the process endow more options with IRC. The most basic option of IRC is the use of fund including practical use and nominal use of fund. To endow more option with IRC is to embed diversified options from the amount, transfer mode, interest rate format, the reimbursement of fund, situation of mortgage and guarantee which involved in the use of fund on the basis of the use of fund according to the requirement of clients to gain profit and avoid risk.Start with the commodity nature of IRC, this paper has been carried through the unique, deep analysis and research of the character of IRC, operation principles of IRC of commercial banks and innovation of IRC through the qualitative analysis, mathematic calculation and the establishment of models, mobilizing the Marxism Labor Theory of Value, Asset & Liability Management Theory of Commercial Banks, Supply and Demand Theory of Currency and the theory & method of Financial Engineering.This paper is divided into 8 chapters. The major part is to answer the IRC operation questions of our commercial banks through three areas. Firstly, answering some the basic questions about the meaning of IRC, value and market; secondly, it expatiate the "two combination", "three uniform", "four separation" principles o IRC operation of our commercial banks in details, it bring forward that the IRC operation is the operation choice of commercial banks, it is the necessity for the development of market, and respond the problem about how can commercial banks follow the three principles. The essential of the third area is that the deep development of IRC operation of commercial banks. It also hand a key to the IRC operator, to tell them how to innovate the variety of IRC according to the development of market and the requirements of clients, and to expand the market of IRC.