Research On Loan Pricing Under The Condition Of Incomplete Competition Mrakte

Since 1996, China officially launched the market-oriented interest rate reform, China’s market-oriented interest rate reform has made substantial achievements. And as time goes on, market-oriented interest rate reform will continue to improve, the central bank regulation on pricing of assets and liabilities business of commercial banks will be gradually reduced, it puts forward new demands to commercial bank’s pricing power. China’s commercial banks must gradually establish risk pricing system to the market demand, only in this way China’s bank can develop steadily in the market full of competition and risk.Since the nineteen seventies, the western commercial bank interest rate pricing theory has developed rapidly, and established a number of scientific interest rate pricing models. However, the interest rate of China’s commercial bank was regulated by the central bank, the degree of marketization was very low. The past business personnel loan interest rate pricing only by virtue of experience, lacked of the theoretical research. In recent years, research on loan pricing began to gradually increase, but most research on loan pricing often excessive focus on loan risk, while ignoring to consider the loan market demand and the market structure of China’s is not completely competitive market on loan pricing process.In this article we use the cost benefit loans pricing method, from the cost of loans, the returns of credit, market demand and market structure. Assume the banking market is imperfect competition market, according to the Basel II IRB on the expected loss, unexpected provisions loss and minimum capital requirements, established a loan pricing model based on imperfect competitive market. Through a loan pricing case analysis of a bank in China, compare the price of imperfect competition market and perfect competition market loans differences, the comparison results show that the not fully competitive market pricing loans is much higher than the perfectly competitive. Finally, we analyse the difference between our case pricing results and the actual loan interest rate, and then put forward some policies and suggestions.