Under The Background Of Excess Liquidity Of Commercial Bank Credit Structure Adjustment

Interest revenue is the main resource of income in China’s commercial banks,depends on the credit scale and the interest rate. After the financial crisis in2008, PBOCtook loose monetary policies and the basic interest rate was getting lower and lower. Thencommercial banks’ revenue space is narrowed on one hand, and there are excess liquiditystaying in bank system on the other hand. To ensure profitability, commercial banks beganto expand the scale of credit. However, because of the limited investing channels and lowlevel of risk management, commercial banks loans mainly to infrastructure, localgovernment financing platforms and real estate. This credit structure is easy to cause assetbubbles and small and medium-sized enterprises are hard to get loan because of high risk.But credit excessive concentration also leads to excessive concentration of risk. Once thecredit concentration enterprises or industries operation risk occur, then default probabilitywill be greatly increased, and commercial banks’ loss will be greater. Besides, excessliquidit and irrational credit structure will hinder the effective transmission of monetarypolicy which can be conclusion from Japanese economic bubble economy in1980’s andAmerican financial crisis in the beginning of the21th century. The commercial banks ofour country should draw lessons from the role commercial banks played during theeconomic bubble’s formation and rupture in the two counties. They should reduce loans oninfrastructure, local government financing platforms and real estate and diversify creditstructure properly. While the commercial banks should actively find new industries whichcan pull economy to grow steady, increase credit support on small and medium enterpriseson the basis of effective risk management and develop more personal loan products.Finally, the commercial banks can optimize the collocation and improve efficiency creditfund, and then ensure their profitability.