Research On Interest Rate Risk GAP Management Of Commercial Banks Under The Liberation Of Interest Rate

The theory and practice of financial deregulation verify the validity and the necessary of interest rate marketing. Meanwhile there may have great interest rate risk in carrying out this reform especially to the commercial banks, whose major business are borrowing and lending currency, to which it may mean huge challenge and concussion. With interest rate liberalization as a major prerequisite, the article devote a lot to the interest rate risk facing the commercial banks in the process of reforms and how to control and manage it.According to the experience abroad, strengthening and enhancing the management of interest rate risk to commercial banks has been the major task to the commercial bank of our nation in the process of interest rate marketing.Firstly, it classifies the interest rate risk in commercial banks into periodic risk and unvarying risk based on the reform process of interest rate marketing. Unvarying risk is the key point of interest risk management and exists in the general process of commercial bank's interest rate operation.The interest rate risk is classified into embedded risk, reprcing risk, yield curve risk and basis risk.Secondly, in order to manage and control interest rate risk, commercial banks should take advantage of the experience of international banks in advanced risk management methods and techniques in order to supervise and control the interest rate risk. And then, we analyze interest-rate risks in detail which commercial banks will be raced with after liberalization of interest rates. Gap analysis, duration analysis, and dynamic simulation analysis, these three risk measurement techniques and how to use them are studied ,at the same time prevent interest rate risk with hedging.Thirdly, an example which further illustrates how to manage and control interest a Rate risks for commercial banks of China is given. At last, an example which further illustrates how to manage and control interest a Rate risks for commercial banks of China is given. Interest rate risk management is a complicated job, so commercial banks should choose appropriate skills and measures to control interest rate risk effectively for keeping their earnings free of adverse influence of interest rate changes.In this thesis, how to manage and control interest rate risks for commercial banks of china is studies systematically around risk controlling not only in theory but also in practice, which we hope will be helpful to interest rate risk management of commercial banks of China.