The Study Of Loan Pricing Of Commercial Bank Under The Marketization Of Interest Rate

At present our country is advancing the reform of economic system andfinancial system, and the interest rate liberalization is one of the most criticalissues. Especially, the process of interest rate marketization in financial areawill be motivated with the establishment of Shanghai free zone. The goal ofthe reform goal is not just about to adjust interest rates, the more importantthing is to reform the price formation mechanism. However, it is still difficultfor Chinese small and medium-sized enterprise to make the loans for theirdevelopment and innovation. SMEs are significant parts of our nationaleconomy, the GDP of which made up about60%of the total, the tax revenueof which made up about50%, the exports of which made up about70%, whichat the same time solved nearly80%of employment in cities and towns of china.Solving the problem of SME loan will further stimulating the vitality of SMEin China and is conducive to the sustainable development of national economy.The research on the pricing of commercial bank loans to SME has an importantguiding role and realistic significance under this background.This paper analyses the loan pricing based on relationship lending with thedevelopment of interest rate liberalization. This paper analyzes the process ofChina’s reform of marketization of interest rate and challenge faced by commercial Banks in China and explores the main methods of the pricing ofthe loan adopted by the domestic commercial banks. This paper presents thatthere are lots of problems of the pricing of loan faced by the domestic banks.For examples, the pricing method is not reasonable, rates are inelastic, thedifferences of industry and regional are ignored, not fully reaction, the creditratings cannot be fully responded and so on.With the analysis and comparison of cost method, price leadership method,customer profit relationship technology, RAROC technology and optiontechnology, this paper puts forward the relationship lending pricing modelbased on real option. The binomial model is adopted to compute expansionoption value and abandonment option value respectively. And ultimately theloan price is acquired under the long-term equilibrium condition.Finally, this paper uses three real companies from service industry,electrical and mechanical engineering industry and chemical industry to verifythe model. The consequence of the simulation is that the loan pricing derivedfrom the real option model is1.29%lower,0.34%larger and1.54%smallerrespectively, which demonstrates that the real option pricing model ofcommercial bank relationship lending is better able to meet the capitalrequirement and cost control of SMEs. At the same time, commercial Banksare able to keep a long-term relationship with SMEs to gain a win-win situation.