A Study Of Interest Rate Risk Management In Commercial Banks Under The Conditions Of Market-Oriented Reform Of Interest Rate

The process of market-oriented reform of interest rate system is promoted step by step. The commercial banks in China are under a complicated circumstance. On the one hand, the financial derivative market is quite undeveloped, a lot of interest rate risk management strategies cannot be applied and the commercial banks even haven't created a primary interest rate risk management system. On the other hand, because the market-oriented reform of interest rate system is irresistible, the adoption of modern interest rate risk management strategies is the final goal which the commercial banks must realize.Combined with experience of market-oriented reform of interest rate system of foreign countries, this paper analyses the temporary interest rate risk theoretically. The permanent risk facing the commercial banks in China is also analyzed in the canonical and empirical perspectives. On the basis of introducing the fundamental interest rate risk measurement technologies, this paper estimates their suitability. Finally, in a developing and dynamic way of thinking, this paper puts forward the following strategies and suggestions from three dimensions: commercial banks should not only create modern interest rate risk management system, but also use different interest rate risk management strategies stage-by-stage. Meanwhile, the supervisor should create a favorable external environment for the interest rate risk management with the internal gradual evolution of systems and strategies of commercial banks. The initiatives of this paper are the empirical study on permanent risks of commercial banks by using the latest interest rate data and the analysis of the causes of their formation. The short-term interest rate risk management strategies are put forward in terms of the present rising trend of interest rate and the objective economic environment. The comprehensive developing strategies for mterest rate risk management are also put forward in mid-term and long-term perspectives. The specific ways of improvement and innovation of the actuals market and derivatives market are also discussed on the basis of the present situation of the bond market.