Research On Loan-pricing Under Capital Allocation

In market economy, product pricing is an everlasting theme. As a basic bridge to join the dealers together, product pricing has a realistic significance, because of the interest of all involved. As an important method to collocate resource effectively, product pricing is one of the core theoretical problems in economics.In China, along with the release of rate supervision, commercial banks get more rights to decide loan rate. If it is right or not, loan-pricing has an important influence on the profit of banks. Researching on loan-pricing, ruling the act of loan-pricing, and how to attract good customers, avoiding the credit risk, all of which have been placed in front of the commercial banks.The New Basel Capital Accord is approaching. Capital management will be the core of future banks, which will put whole risk management in practice. Under the supervision framework of modern commercial banks, capital quantity determines scale-expanding ability, risk-resisting ability and market-surviving ability of commercial banks. Capital management, capital abundance and capital return are the cores of international commercial banks, and will be the direction of China's banks. Capital allocation will enter into every corner of bank, and becomes the precondition of every operation cell. Loan department is certainly not excluded.The purpose of this paper is finding a new way to connect loan-pricing and capital allocation. Then loan-pricing can improve commercial banks'economy benefit under the situation of capital allocation's full advance.First of all, this paper looks back the process and influence of loan rate marketing, introduces basic methods of loan-pricing, analyses the actuality of China's loan-pricing, and discusses capital supervision's possible influence on loan rate theoretically. Then, this paper constructs loan-pricing model under capital allocation, which is based on product pricing theory and asset pricing theory, and applies busywork cost theory, capital management theory, RAROC method, CaR method, CAPM model. At last, this paper carries through a case analysis, using inside and exterior data of a city commercial bank. Then I automatises the loan-pricing by designing a loan-pricing procedure and a loan efficiency evaluation procedure.