The Relationship Between Interest Rates Marketization And Commercial Bank Financial Innovation

As the financial market continuously open and development, interest rate marketization is aninevitable trend. Interest rate formation mechanism in China from the overall control continues totransition to a market-oriented, slowly relax monetary authorities or to give up direct control or limitinterest rate, money market rates, in turn, depends on supply and demand. In this article, through theempirical analysis on interest rate liberalization and financial innovation made up study on furtherdialectical relationship. Interest rate marketization leads to financial system innovation, market-oriented interest rate will cause the bank organization innovation; market-oriented interest rate willstimulate bank financial product innovation, the three aspects of in-depth analysis. Financialinnovation, meanwhile reaction in three aspects: promote the development of market-orientedinterest rate, the results and conclusion of the article, and finally obtained, proposed our countryinterest rate liberalization and financial innovation in the new period of the policy recommendations.Interest rate marketization is an important step in China’s financial deepening reform,market-oriented interest rate involved in all aspects of the financial sector, especially for financialinnovation is of great significance. Financial innovations emerge in the process of businessinnovation, institutions, institutional innovation, which provides an opportunity for financial marketdevelopment. Interest rate liberalization and financial innovation is actually a pair of twin brothers,economic development to a certain stage, whether in which country, the original regulations containlead to can’t breakthrough, financial innovation has become more important right now, it will breakthe original specification, trigger a new thinking, and then promote the reform of the marketizationof interest rates. This is financial two sword of the new era, we need to grasp the dialecticalrelationship of the two, optimizes the allocation of financial resources effectively, a breakthrough ina new era of China’s financial system.