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Study On Interst Rate Risk Management In China's Commercial Bank

Posted on:2003-12-08Degree:MasterType:Thesis
Country:ChinaCandidate:G ChenFull Text:PDF
GTID:2156360092491322Subject:Finance
Abstract/Summary:PDF Full Text Request
Along with the development of market economy, finance has become the centre of the modern economy. Being the price of fund, interest rate plays a more and more important role in the financial market. In the late seventies to eighties, the occidental developed countries had been slacking off financial control successively, interest rate became market oriented, giving rise to its fluctuation, which had significant impact upon the stability and acceleration of the banks' profit. Facing the interest rate risk, commercial backs in the west had to strengthen up the management to the interest rate risk. Thereafter, Interest Rate Risk Management (IRRM), an important management theory and tool to the modern commercial banks was born.In our country, although interest rate has been strictly controlled, as the economy leverage to the central bank, it still fluctuates periodically, especially after the China's entry into WTO. Therefore, it is inevitable for the China's interest rate become market oriented. With the opening to the interest rate of foreign currency and RMB interest rate market oriented gradually, reform on interest rate has stepped into substantial phase, and has to arise great impact upon various fields of economy and finance. Commercial banks in China have shouldered enormous interest rate risk, however, awareness to prevent risk appears to be so weak that they stand on passive position in front of the risk. Liability of the commercial banks becomes more and more obvious in the risk of interest rate and it is important to enforce the analysis and study on the interest rate risk.Begin with the awareness of risk, the paper points out the important role of the interest rate risk management in banking administration. It also gives observations on China's interest rate management through applications on theory of interest rate risk management to commercial banks: dissecting the appearance and reason of interest rate risk in China's commercial bank and the existing problems during management, exploring the measurement for the risk, and bringing forward the practical measures to bring down the risk and strengthen the management. In the end, based on summarization on experience of interest rate risk management of occidental commercial banks, it comes up with strategic conception of interest rate risk management to China's commercial banks, in aspects of establishment on effective modern interest rate management mechanism and sound inner control mechanism, etc.
Keywords/Search Tags:Commercial Bank, Interest Rate Risk, Management
PDF Full Text Request
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