A Study On The Influence Of Interest Rate Liberalization On China’s Small And Medium Merchant Banks

In July 19 of 2013, the People’s Bank of China decided to fully liberalize the lending rate controls of financial institutions since July 20 of 2013 which approved by the State Council. Interest rate marketization in our country has entered the deep water which is only the last step with the distance of the full marketized rate-the liberalization of deposit rates.The reform of Interest rate marketization has promoted the economic development in our country, creating a fair and competitive environment for financial institutions as to improve the efficiency of the financial system which is running. For commercial banks which is as key members of the financial system, which is importantly effected by the reform of interest rate marketization.The reform of Interest rate marketization brings risks and challenges for commercial banks, testing the viability and management ability of banks, while also providing opportunities to accelerate the development of the commercial banks, and how small and medium commercial banks is lack of resources advantages are respond to this campaign, maintaining adequate competitive in an increasingly open management environment which relates its ultimate survival. Therefore, the research on the impact of the interest rate marketization for China’s small and medium commercial banks as well as how to make appropriate countermeasures and arrangements has important theoretical and practical significance.This paper first describes the relevant theory about the interest rate marketization, analyzing conduction path on that the interest rate marketization is on commercial banks. Meanwhile, this paper recalled the history of reform of interest rates marketization in developed and developing market-oriented abroad, summing up the change of foreign banks after the interest rate marketization, accumulating experience for the transformation of China’s commercial banks; Secondly, combining theoretical analysis and foreign experience on interest rate marketization based on reviewing market-oriented interest rate reform process,this paper analyzes the impact of market-oriented interest rate on Chinese small and medium commercial banks from two aspects of the operation and management, the results show that the business strategy of small and medium commercial banks did not keep up with the pace of interest rate marketization and the bank’s risk management capabilities are weak. Finally, combined with China’s national conditions, this paper puts forward relevant suggestions from the transition of the way of management, business restructuring, strengthening financial innovation, improving risk management.