Consideration To Interest Rate Marketization For Commerical Banks

It is generally accepted that the market-based reform of interest rate that started in 1996 has been a crucial reform of the current financial field in China. The government has made certain progress . Despite the peripheral and partial reform as a whole, it should be admitted that is the reform trend that will prevail. In reality, the commercial bank has been already unable to avoid the fact that market influences and even determines the interest rate.The market-based reform of interest rate is a great challenge to abilities of management and adaptability for commercial banks. commercial banks should take certain actions in face of this trend. In order to keep their positions in the fierce competition, commercial banks must looks for the countermeasure to adapt to new situation As a result, it is of great importance for the study of behaviors of commercial banks in relation to the market-based reform of interest rate.Therefore, the purpose of this essay is to examine the basic meaning of market-based interest rate and development process of the market-based reform of interest rate in China. In addition, it introduces the reasons and conditions market-based reform of interest rate in our country as well as its impact on commercial banks. Moreover, this paper analyses the financial risks that the market-based reform of interest rate may produce and puts forward some countermeasures. Furthermore, it covers a range of market-based reform of interest rate in several countries around the world and analyses their experience and lesson that we should use for reference. Finally, taking China Construction Bank Shenzhen branch as an example, this paper emphasizes the current measure that commercial bank takes in line with the market-based process of reform of interest rate and put forward several viewpoints to the weak points.In this paper, 'regards customer as the centre' should be considered as an important principle for commercial banks to adapt to the market-based pricing mechanism of the interest rate. On the other hand, strengthening the risk management and control is thought to be an essence of them to adjust to the market- based of interest rate. This text discusses further that the domestic commercial bank should make great efforts in products innovation in the future, and constantly explores the intermediate business opportunities in order to improve profitability and adaptability of the commercial bank synthetically.To conclude, China's economy is being developed at high speed steadily and draws attentions from all around the world. Therefore, it is believed that commercial banks of China will adjust to the new situation of market-based interest rate successfully and develop vigorously.