Research On Loan Pricing Of Commercial Banks In The Liberalization Of Interest Rate

The interest rate liberalization is one important step in the process of financial reform in china. On October 29th, 2004, there is no limitation on loan interest rate ceilings of financial institution by the people's bank of china's decision. So, the commercial bank can decide the loan pricing by themselves, then, the loan pricing become an important issue to commercial bank. Loan business plays a prime role on asset structure of commercial bank in China. On the data statistics of annual reports of four state-owned commercial banks(2004), Loan revenue take up above 60% of commercial bank's operating income, Loan accounts for above 85% of commercial bank's asset .So, it is important that whether loan price could cover cost and risk of bank,and whether it could get the maximum of benefit. So, the research in this paper has practical significance to commercial bank.First of all, this essay introduces the basic theory, the principle and the goal of the loan pricing of commercial bank. Then, according to our country actual situation, this paper gives two pricing models: cost-plus pricing model and the customer profitability analysis model by learning from the western commercial bank's tradition loan pricing model, by the guidance of economic capital─the modern bank risk management core technology. It could be referred by commercial bank. The last part of this essay mainly research on the foundation of loan pricing model, which includes risk premium, cost of funds, operation cost, supposed profit. In this thesis, the default rate can be inferred by using the historical data of bank risk division, the data of cost of funds can be got by using the funds transfer pricing, and use the activity-based costing to calculate the operation cost. All of these works are useful to the research on the loan pricing in the liberalization of interest rate.