The Management For Interest Rate Risk Of China’s Commercial Bank:Method、Perfect And Prospect

Interest rate is as the price of money and has an important role in regulating the allocation of financial resources, but this function need a more developed financial market as a support. China’s financial market infrastructure development lags behind, which inhibits the effectiveness of interest rate to adjust the financial resources. Commercial banks that is as the most important financial market subject to Executive Order in the early stage of development,which makes the business function weak. With the continuous reform of the financial markets and constant improvement of business functions, commercial banks face more risk factors and more complex interest rate risk.These risks are formed in the weakening of the pricing ability of commercial banks, the weakening of the commercial banks’ capital and the main changes in behavior. For this stage of China’s commercial banks and complex interest rate risk, China’s commercial banks how to take interest rate risk management strategies which suits to their own level of development is essential.On the basis of analysis of full understanding of China’s commercial banks to interest rate risk,author anaylzes the major shortcomings of interest rate risk management approach taken to manange risk at this stage.Because the ability of China’s commercial banks to manage interest rate risk is weak, China’s commercial banks take the gap management approach mainly and developed derivative instruments just plays a supporting role. First, China’s financial market is relatively weak and high leveraged derivatives can easily produce losses. Second, because of the strong investors’ profit-driven consciousness, weak risk awareness, lack of self-discipline and illegal operations frequent. Third,Gap management has been generally adopted by China’s commercial banks to manage interest rate risk,but this method requires precise data classification, the more accurate predictions of interest rates and stability of the yield curve changes. These conditions are difficult to achieve in reality, which limits the effective application of this method.For the process of China’s commercial banks to interest rate risk management, author thinks we should draw on the experience of foreign foreign commercial banks to interest rate risk management, capital management and improve internal control. The experience of foreign commercial bank to manage interest rate risk tells us that we should improve the construction of financial markets, develop new interest rate risk management products and develop a high level staff to manage risk. Capital management is to change the former strategy of focusing on the number of capital, and to moderate capital position control, which is to enhance the commercial bank’s ability to resist risks. Improving their internal control, we should rationalize the relationship between state-owned commercial banks and governments continue to improve the internal governance structure. The implementation of these measures is to strengthen the inherent strength of commercial banks to manage interest rate risk, and to enable that the commercial banks does not entail a systemic impact in the face of interest rate volatilityFinally, the interest rate market-oriented will continue to push forward during the Twelfth Five.Because the interest rate market-oriented will take negative impacts to commercial banks’ interest rate risk,we should do a macro-top-level design and micro-technological breakthroughs.