The Impact Of Interest Rate Marketization On Commercial Bank Profitability

As the price of money, the interest rate will have a great influence on the whole national economic system when it is changed. Especially in the financial markets, changes in interest rates will have a profound impact on its stability and security. Our interest rate marketization began in 1996,with the liberalization of interbank loan market interest rates. By the late February 28 this year, the people’s bank of China announced that since March 1, 2015, financial institutions RMB loan and deposit rates will be cut. It shows that the marketization of interest rate will gradually achieve, financial institutions will decide the interest rates independently.Commercial banks, as the important participants in the financial markets, its operation and development will be affected by interest rate marketization reform. During the period of interest rate control, the people’s bank of China to decide the commercial bank deposits, loan interest rates. And the profitability of commercial Banks depends on the spread of deposit and loan interest rate stipulated by the people’s bank of China. The interest rate marketization will greatly influent the commercial bank inevitably. This article selected ROA as a measure of bank profitability, and analyzed impact on our country commercial bank profitability.Research of the affection of interest rates marketization on our commercial bank profitability is from two aspects: theory and empirical. The article is divided into five chapters: first chapter includes not only the background、significance、content and method of the research, but also the relevant literature review, and possible innovation and shortage. The second part, we introduces the present theory of interest rate marketization. We summary the market-based reform of interest rate in US and Japan in the third part, in order to learn some experience and lessons. In the fourth chapter, we can see the empirical analysis of the impact of interest rate marketization on main commercial bank profit index. Finally it comes to the conclusion and suggestion.