Research On Interest Rate Risk Management Strategy Of Jiangsu Bank

Since 1996 when China began the reformation of the interest rate marketization, there has been a great progress after 20 years continuous development. China has initially realized the interest rate marketization by July 2013 the loan interest rate marketization realized and October 2015 officially releasing deposit interest rate ceiling. Economic entities can obtain a greater bargaining power of funds, the central bank has more information resources and quantitative tools to adjust the amount and commercial banks have more means to increase their income. However, the commercial banks will face more serious interest rate risk and more difficult management risk during the further development of the interest rate marketization with the interest rate volatility increases. So, it is an extremely important topc for commercial banks that risk management of interest. This paper takes the Bank of Jiangsu as the research object, to research the interest risk of Bank of Jiangsu by analyzing interest rate sensitivity risk and testing the interest rate risk stress. Then find out the interest risk management shortage of Bank of Jiangsu through the analysis result from current situation of Bank of Jiangsu’s interest risk management. In the end, propose the solution to cover the found shortage, to make sure the control and management on interest risk.There are 5 sections in this paper. Firstly, the paper introduced the domestic and foreign classical interest rate risk theory and the interest rate risk management theory. Then it stated the background and current situation of interest management at Bank of Jiangsu. The third, issues are defined by interest rate sensitivity risk analysis and interest rate risk stress test. At last, and optimize the deposit structure, to enhance the level of loan portfolio pricing, to accelerate the pace of integrated business etc. Through the analysis of interest risk management at Bank of Jiangsu, it’s helpful to understand the problems of commercial banks interest management in China, also provides a reference case on interest risk management study. It has a positive significance to improve the interest rate risk management ability of commercial banks and to guard against interest rate risk in China.