The Study On Deposit Interest Rate Marketization Reform Of Chinese Commercial Bank

In the context of financial globalization, as the core of financial reformation, theinterest rate also becomes the mainstream trend of the national development offinancial markets. Since the1980s, most countries led by the US have completed theinterest rate marketization. Our country begins to promote the reform of theMarket-directed Interest Rate at1996. After years of development, i nterest rate of thecommercial bank loans is fully liberalized on July20,2013, market-oriented reformof interest rates remaining deposit interest rate reform until now. From theinternational experience, the interest rate liberalization can promote the developmentof economy, but it also takes risks and challenges to commercial banks even thecountry. Chinese commercial deposit rate is the most important and last step in themarket-oriented reform of interest rate liberalization process. Because of itsimportance, many things must be done before we fully liberalized deposit rate, forexample in-depth theoretical analysis and empirical demonstration. We also shouldprepare to deal with the risk emerged in the process of the interest rate marketizationahead of time and put forward some effective suggestions.This paper firstly analyzes the background and significance of Chinese interestrate liberalization, and also summarizes the document of market-oriented interest rateat domestic and overseas. Then it studies the theoretical basis of the interest ratemarketization and expounds the reform of interest rate on deposits of the effect oneconomic growth mechanism and the influence on the commercial banks. After that,the paper selects USA reform case has realized the interest interest rate liberalization,Analyzing the deposit interest interest rate liberalization, and the influence of theAmerica economic and commercial banks. From the analysis, we sum up theenlightenment on the reform of deposit interest rate marketization in our country.Then the paper turns to the study of China, The empirical part through establishingthe VAR model and impulse response function analyzes the movements of depositinterest rate on the impact of Chinese macroeconomic and commercial banks, andconcludes that the control of interest rate leads to the imperfection of the financialmarket of our country. From that, we get that the volatility of the interest rate cannotbe well reflected the demand situation of the market capital and expound the openingdeposit rate control and the necessity of the deposit interest rate marketization reform.After then, we analyze the difficulties of deposit interest rate marketization reform inour country through analyzing the process of it. At last, to ensure the smooth realization of Chinese market-oriented reform of deposit interest rates, the paper putsforward policy recommendations in the final chapter, for example, promoting usefultransformation, improving interest rate risk management, completing base rate system,strengthening the supporting institution building, accelerating macro-prudentialregulation.