Research On China Commercial Banks’ Operation Efficiency:Based On Interest Rate Liberalization

As an important step of deepening the reform of financial system in China,the pace of interest rate liberalization reform is obviously accelerated.In the year 1996,China first allowed the interbank lending market interest rates rise freely according to market supply.This means the reformation of interest rate liberalization had begun in China.In July 20th 2013,the RMB had finished unilateral interest rate liberalization,which means the interest rate marketization has touched the core zone.In Sept 24th,2015,China’ s central bank cut the benchmark lending rates and the deposit reserve ratio,and no longer capping the deposit interest rate of financing institution.This means that China’s rate control has been relaxing,and the financing institution can be negotiated the price of the financial product freely according to the market rules.Interest rate liberalization will give significant influence on the commercial banks.Among the impacts from the interest rate liberalization,the impact on commercial banks’operating efficiency cannot be ignored,which will bring great influence on sustainable development of commercial banks.Started form the framework of "Literature review--theoretical analysis--Empirical Analysis--policy recommendations",this paper use normative as well as empirical analysis method to discuss the theme of China’s commercial banks’ operating efficiency under the background of interest rate liberalization.On the basis of the existing literature,the paper expounded the theoretical and the historical evolution of interest rate liberalization,and analyze the influence mechanism and effect of interest rate liberalization on the operating efficiency.And then,on the basis of empirical analysis and intenational comparison,the paper proposed some policy suggestions to improve the commercial banks operating efficiency.This paper can mainly dividend into seven parts as follows:Chapter two is the domestic and international literature review.This part mainly summarizes the process,experience,and the impact on financial market of interest rate liberalization.The article also carries on more comprehensive combing to the impact domestic and international on commercial banks’ operating efficiency,which is the foundation to support the later research.Chapter three is the theoretical analysis of the commercial banks’ operating efficiency under the back ground of the reformation of interest rate liberalization.Firstly,this part comprehensively summed-up the theoretical evolution of interest rate liberalization,which laid foundation for the later qualitative and quantitative research.Secondly,this part theoretical defined the commercial banks’ operating efficiency.Thirdly,the part analyzed the influence factor,influence mechanism and the detail effects of the impacts on commercial banks’ operating efficiency.Chapter four is to analyze the extent of China commercial banks’ interest rate liberalization.On the basis of literature review,this part used the historical analysis and the literature review approach to summarize the historical process of China commercial banks’ interest rate liberalization since the reforming and opening up in China.And then,this part analyzes the current situation of commercial banks’ interest rate liberalization,and measured the index of China commercial banks’ interest rate liberalization empirically.This part is the basis of the empirical analysis section.Chapter five used the parameter and non-parameter estimation(DEA and SFA)approach to measure the operating efficiency of China’s commercial bank.This part used the data of 16 listed commercial bank companies to measure it accurately.This part can give some data support for the later empirical analysis.Chapter six empirical analyzed the factor from interest rate liberalization inside and outside of China’s commercial bank.The results show that,there is significant positive correlation between net interest income and banks’ profitability,and also between the commercial banks’ and banks’ profitability.But there is significant negative correlation between the currency supply and the commercial banks’ non-performing loan ratio.And also between the income structure and the operating efficiency.This part provides the reference to the policy proposals of the later parts.Chapter seven discussed some policy suggestions to improve the efficiency of China’s commercial banks under the background of interest rate marketization.This part puts forward the general idea of improving the operation efficiency of commercial banks in our country:to promote the transformation of intermediary business,to reshape the development of retail business and expand the international financial business.Under the guidance of promotion,the paper put forward the specific suggestions of supporting measures and policy support to enhance the operational efficiency of China’s commercial banks.Through the research above,this paper calculated the current market interest rate of China’s commercial banks index was 96.26%,which has basically achieved the interest rate market.For commercial banks,the impact of interest rate marketization on its operating efficiency is mainly through the impact of its profitability,business structure and risk control.This paper also made an empirical analysis on the specific factors of commercial bank operating efficiency.The results showed that,the interest rate pricing ability of Chinese commercial banks still needs to be improved.Under the background of interest rate marketization,commercial banks must adapt to the market-oriented capital control mode and optimize the allocation of credit resources based on the intensive distribution of capital,to maintain a stable and efficient operation efficiency.