Study On Risks Of Commercial Banks’ Interest Rate Liberalization In China

As one of the main driving force of economic development,the financial industry is undoubtedly dominant in today’s comprehensive national strength and competition.The commercial banks are the basis of the financial industry and the financial system in our country, to our country economy development and the operation of the national macro policy and common people’s vital interests,which influence is extremely important. As the financial reform and the mature of market economy, interest rate liberalization has become an inevitable trend, commercial bank as financial innovation and the key to reform must become the breakthrough point and focus of our country’s interest rate liberalization.As deposit insurance regulations on May 1st, the steps of interest rate liberalization drifting close to the last step,the whole society awaited the arrival of the commercial bank interest rate liberalization, the urgency is clear. Commercial bank interest rate liberalization of the rational allocation of capital to the market, to enhance the efBciency of the use of funds is very beneficial, it seems to increase and accumulation of the wealth of ordinary people and corporate financing and development are helpful,stability and development of the whole nation’s financial system is very important. At the same time, the commercial bank interest rate liberalization is the inevitable demand of the rapid development of commercial banks themselves, at the same time,they are subject to domestic and foreign financial market and the economy development inevitable trend..Commercial bank interest rate liberalization also reversed transmission country related supporting the establishment and perfection of the legal system, is beneficial to the country formed a sound legal system,providing legal protection for the better development of commercial Banks. However, opportunities and risks always accompanying, from countries with large numbers of market-oriented interest rate reform, the reform of the encounter twists and turns and failure is not in the minority, not only lead to commercial Banks themselves have failed, but also makes the country into great trouble, and even trigger a financial crisis, the extremely serious consequences. Commercial Banks are the process of liberalization of interest rate and stable development in the financial market in an impregnable position, positive and effective means of risk prevention and control is necessary. Liberalization of interest rate risk of commercial bank in line with the business expansion and scale of economic development and strengthen the legal risks by initially only evolved into diversification and complication of various risks now, for the prevention and control put forward severe challenges.This article through the support of basic theory of interest rate liberalization about financial deepening theory and financial constraint theory expounded according to our country’s present economic development situation and existing problems of commercial Banks in China. Putting forward to the urgency and necessity of market-oriented interest rate reform. On the risk of our country commercial bank,the interest rate liberalization could trigger a detailed interpretation, putting forward to the possible competition between commercial Banks risk, including the risk of commercial bank’s monopoly and small and medium-sized Banks bankruptcy risk.Then the second part is due to the asymmetry of information between commercial banks and customers and the drive of interests of the credit risk caused by a variety of reasons, from the two aspects of commercial Banks as the main and dominated by the customer for credit risk. Major opportunity at the same time, facing for the liberalization of interest rate and strong shock of the situation, from the commercial Banks should be timely product range, the system management and internal corporate governance structure, the commercial banks in China due to the traditional management pattern and the lack of corporate governance structure and weak anti-risk ability, and many other factors will inevitably facing financial innovation brings a series of complicated and arduous challenge.In combination with abroad,such,as the United States, Japan and South Korea developed countries, developing countries of Argentina market-oriented interest rate reform practice, it summarizes the successful experience and draw lessons from failure and reinterpretation of the risk to our country commercial bank interest rate liberalization can cause from the perfect our country commercial bank withdrawal mechanism, establish a financial consumer protection system, integrated management system of commercial bank, setting up perfect financial experts, lawyers and bank executives responsibility system, perfect the legal system of our country social credit many aspects to perfect our country commercial bank interest rate liberalization legislation system of risk prevention and control;From the perfect our country commercial bank’s corporate governance structure and establish and improve the specialized internal risk prevention and control institutions to perfect our country commercial bank interest rate liberalization of internal control system; From external supervision system, consummates our country commercial bank to establish social credit inquiry system in our country, in accordance with laws, create a fair and orderly market competition environment, for the sustained and rapid development of commercial Banks and provide a powerful legal protection to resist risks and a full range of legal services.