A Study On The Influence Of Marketization Of Interest Rate On China’s Commercial Banks

Interest rate is one of the important levers of market economic activities, which has close connection with social economy in many ways. The marketization of interest rate is the objective requirement and inevitable result when an international financial industry develops to certain stage. Liberalizing lending rates is one of the contents of the reform of China’s macroeconomic regulation and control. It is a major breakthrough in the marketization of interest rates and is a sign of the deepening of financial reform. The liberalization of loan interest rate, as an important measure of financial reform, will has overall, systematic and lasting influence on Chinese financial industry.With the continuous development of China’s commercial banks, the effect of market mechanism in the interest rate is becoming more and more obvious. The macro economy of our country functions smoothly and it is ripe for further reformation. In microcosm, reform of China Commercial Bank advances steadily and bank pricing ability continuously improves with a suitable environment. Therefore, the macro and micro conditions to further promote the interest rate marketization have been possessed.After the marketization of interest rates, it expands commercial banks’pricing margins with even greater pricing power and it benefits for banks’differential pricing. However the competition of the traditional business will become fiercer because of the improvement of bargaining ability of high quality corporations. Therefore, commercial banks must change the management mode and improve the level of operation, management and service. And commercial banks must step up growth support for medium and small enterprises and adjust the business structure, optimize the credit structure and improve the credit model, risk control and business processes to realize diversified business and to regulate operation. Commercial banks must accelerate their transformation and upgrading to deal with interest rate marketization. Based on the analysis of the impact of China’s commercial banks interest rate market in both theoretical and practical scopes, this paper discusses the influence of interest rate marketization on the commercial banks of China and proposes strategies of China’s commercial banks responding to the interest rate marketization.