Research On Commercial Bank's Loan Price

In the process of interest rate marketization,loan price decision reflects the economic accounting and rate decision system of the commercial bank comprehensively.Externally,it is a negotiation between bank and customer on the price of the lent money;internally,it is a control on the asset operation risk and on the expected yields.In order to make the loan business efficient,low risky and flexible to market changes,an effective loan pricing mechanism is necessary to commercial bank.This essay is built on the fundamental theory of contemporary economics and finance.By analysing the background of domestic interest rate marketization and current status of commercial loans pricing,four pricing models: Cost-plus Pricing,Benchmark Added mode,Customer Profitability Analysis and RAROC are compared in this essay.Based on this,an intensive research on RAROC is elaborated that this model is targeted for the security and profitability of commercial bank by considering its fund cost,operation expense and risk cost, therefore,it is a beneficial loan pricing model for commercial banks.After the elaboration,the procedure for applying RAROC mode is introduced.In the last part of the essay,the author concludes that strengthening the economic asset management is essential to improve the domestic commercial bank's weakness in credit risk pricing and to the promotion of RAROC mode in China and proposes that commercial banks should establish the economic asset management culture,enhance the awareness of modern operation and management system,intensify the risk management and strengthen the construction of fundamental management.