The Applied Research Of Asset-Liability Management Of Chinese Commercial Banks In The Process Of Interest Rate Marketization

In recent years, with the rapid progress of the marketization of the interest rate, the management control and profit model of the commercial banks will be greatly influenced. On one hand, the marketization of the interest rate will create a freer management environment for the commercial banks which will be propitious to optimize the allocation of resources and enhance the management autonomy; on the other hand, there will appear such problems as tense competition between the commercial banks and increasing operating risks at initial stages of the marketization. Thus, interest rate risk will expand which will have a direct influence on the net interest income and other income and expenditure sensitive to the interest rate, and thereby on the operating profit.Having established a set of Asset-Liability Management (ALM) system based on proportion control, which plays a historic role in upgrading management level and controlling risk of he commercial banks, the level of the ALM in our commercial banks has improved to some extent. Even though, it is still a relatively elementary management style, which has a wide gap compared with the mature ALM style in Western commercial banks, much less the requirement of the new Basel Accord in 2003. Therefore, it has been a core of the ALM to strengthen the management of interest rate risk. The fundamental purposes of the ALM in our commercial banks are to keep the interest rate risk within the limits of the qualifications instituted by the ALM committee and to raise the net interest income as much as possible, i.e. to realize the maximization of profit based on a certain interest rate level.The result of the experimentation demonstrates that the one-year-time Funding Gap of the sample bank shows itself negative, and the sum of the negative gap is relatively large, especially those below three-month-time. At present, we are in the period of rising interest rate. So the negative gap affects the bank profit greatly. The market risk facing our commercial banks cannot be neglected. Adopting advanced means of ALM has been the key of upgrading operating level and earning power.Our financial market is now in the changing phase. Though the economic and financial environment are somewhat different from those in the 1970s America, there are alot of similarities. For example, the change of interest rate surveillance, operating and managing respectively, fluctuating from low interest rate to high, and the budding of inflation. As the financial reform in our country is deepening, the commercial banks will be confronted with more risks in the marketization of management control. Using the western ALM theories and techniques will guarantee a healthy, stable and sustaining development of Chinese commercial banks.