The Opportunities And Challenges China’s Commercial Banks Facing In The Interest Rate Market

With the deepening of the country’s economic system reform and the reform of the financial system,the reform of China’s interest rate market began to enter a period of rapid development,the period of time inthe future will be the steady progress of the financial markets of stage. The interest rate market will helpimprove the financial market environment and the operational efficiency of the financial system, optimizethe allocation of resources, guide the entire financial sector and the whole socio-economic to achieve abalanced. However, the practical experience of the international interest rate market is indicates that thiswill be a long, tortuous process,although it bring to commercial banks more independent pricing, but alsoto hide the huge risks. For developing countries, due to its weak economic base, the impact resistance is notstrong, want to promote interest rate will involve more risks, brought China’s banking industry new shocksand greater challenges.So,in the process of China’s interest rate market, research the impact of thecommercial banks will still have important theoretical value and practical significance.This article will be standing on the the perspective of commercial banks to analyze the impact of allaspects of the commercial banking operations and risk management form Interest rate market,which willfocus on the mathematical analysis to the commercial banks’ interest rate risk situation in the process ofmarketization of interest rates, then from research to explore a number of measures taken in response, makecommercial banks to operate more smoothly,even on this basis, seeking some methods to improve the levelof profitability. The article first provides a brief exposition of the research status at home and abroad on theinterest rate market,then analyzed some of the problems that exist in the process of reform; Secondly, theadvanced practical experience in foreign interest rates market were analyzed and summarized, thencombined with foreign practice to sort out the conditions of China’s reform to analyze the possible impactof China’s commercial banks;thirdly, Theoretical and empirical analysis of the interest rate risk status quoof China’s commercial banks face in the interest rate market, the empirical part use the gap model todemonstration,reveal the commercial bank interest rate risk management problems and deficiencies thatmay existed. Finally, the corresponding countermeasures and suggestions to strengthen the interest rate riskmanagement of commercial banks in China been proposed,this will have more far-reaching practicalsignificance.This paper argues that, in today’s financial background,the interest rate risk faced by commercialbanks in China is growing,and there are also many problems in Interest rate risk management. First, our country commercial banks’ interest rate risk identification, measurement, evaluation, detection and controlis still at the primary stage,risk management organization structure is very unreasonable. Secondly, throughthe empirical analysis can be found that China’s commercial banks have significant asset and liabilitystructure mismatch, if the interest rates frequent fluctuations in this case, it will bring greater impact to thebank. Finally, we analyze the external environment of the bank, found that the national regulatory agency’spolicies and regulations are not sound enough, and the monetary financial markets is not perfect, these willbe detrimental to the interest rate risk management of commercial Banks. In this regard, the article in thefinal proposed some recommendations.For examples, continue to strengthen the commercial bankspreventive management of interest rate risk;learn use of financial derivatives to hedge interest rate risk inscientific;actively promote the reform of the profitability structure and business model of commercialbank;accelerate the improvement of the external regulatory environment and financial markets’construction and so an,to create conditions for better interest rate risk management.