The Research On Development Of Intermediary Business Of Chinese Large Commercial Banks On Interest Rate Liberalization

For quite a long time, deposit and lending has been the main business of thecommercial bank in our country. In the meanwhile, interest income is the main source ofprofits, and the proportion of intermediary business income is much lower. Although thecommercial banks’ business concept is changing in recent years, along with intermediatebusiness achieving a certain development, but there is still large gaps compared withWestern commercial banks.June8,2012, the People’s Bank of China will limit deposit rate floating rangeadjusted to1.1times the benchmark rate for financial institutions, which is the first timefor China to open deposit rate limitation. July20,2013, the People’s Bank of Chinadecided to cancel the limitation about0.7times of lending rate for the financial institutions,meaning the full liberalization of lending rate. These two important point fully reflects theprocess of interest rate liberalization is in speeding up. Promoting interest rateliberalization, the new development opportunities and more autonomy in pricing have beenbrought to commercial banks, while narrowed the deposit and lending rate promptscommercial banks changing traditional business model–relying savings and loan spreadsto get high returns unsustainable. Commercial banks need new revenue model to anasset-light services shift from heavy reliance on traditional deposit and loan spreadsbusiness model, no doubt, vigorously develop intermediary business, and actively carry outnew product development and service innovation, will become a commercial bank to dealwith the impact of the interest rate market important strategy. Based on the background ofinterest rate liberalization, this article is to study the innovation and development ofintermediary business with the large commercial banks as the research object.The analysis of the development of intermediary business of China’s large commercialbanks before and after interest rate liberalization and the practice of other countries showsthat the relationship between interest rate liberalization and the development ofintermediary business. And on this basis, this article analysis the current development ofintermediary business of large commercial banks at present, especially for problems such as low intermediate business income, lack of innovation, insufficient risk awareness. Andfinally it puts forward a proposal that large commercial bank should develop intermediarybusiness to response to the policy of interest rate.