Research On The Countermeasures Of China Commercial Banks Under The Background Of Interest Rate Marketization

The interest rate liberation is the route one must take to develop modern finance and releasing rate control will make a significant influence on commercial banks. The question is that if the banks treat it well they will seize the opportunity and achieve rapid development, otherwise, they will be stuck in trouble or even be bankrupt. Therefore, nowadays making a deep study on the countermeasures of Chinese commercial bank interest rate marketization is very critical.The advancement of interest rate liberation was based on a profound historical background and a solid theory basis. In 1970 s, the western capitalism world began to be influenced by a phenomenon called stagflation, that is high unemployment and inflation appear simultaneously. The appearance of stagflation overwhelmingly shook Keynes theory, many kinds of new economic liberalism were born out, formed a variety of “anti-keynes” schools. Among them, Mc Kinnon and Shaw put forward the “financial repression” and “financial deepening” theories which is the financial theoretical basis of new liberalism. What’s more, both of the “financial repression” and “financial deepening” theories play an important role in the process of interest liberation reform, Mc Kinnon and Shaw emphasized that because of excessive government intervention in the formation of various elements of the prices in financial market,many financial prices are distorted and the development of the financial system is inhibited that will repress the macro economic growth. Therefore, Mc Kinnon and Shaw stressed that we should deepen the currency, reform the interest rate market, and take appropriate measures to break the dual financial system.Foreign interest rate liberation practices have both successful experiences and failed lessons. Although the progresses of interest rate liberation in Japan and the United States were relatively smooth, there were a large number of small and medium-sized commercial banks went bankrupt. South Korea after the failure of the first interest rate liberation reform, the second attempt was successful, but soon after that, during the Asian financial crisis, many commercial banks sunk into economic predicament, even Korea first bank, Seoul bank and other large commercial banks were acquired by foreign transnational corporations. The governments of Chile, Argentina, Uruguay, just pursued the speed of interest rate liberation, regardless of the economic environment of their countries, therefore the reforms in these countries failed soon. The enlightenment of foreign interest rate marketization practices is that the marketization itself has a common order which cannot be changed arbitrarily. Stones from other hills may serve to polish the jade of this one. Learning the experiences of advanced countries can avoid the occurrence of the same type of error and have great significance to study the measures of treating interest rate marketization for commercial banks.China’s interest rate reform began in 1996 which has been carried out for 19 years. So far, China’s reform of interest rate liberalization has only one step left that is releasing the deposit interest rate control. From the beginning of interest rate marketization, China’s commercial banks had made corresponding adjustments to their business operating strategy and had achieved positive progresses, but the overall preparation for interest rate liberation is not sufficient. In order to properly adapt the new interest rate liberalization environment, China’s commercial banks still have a long way to go. As the rate of Chinese commercial banks’ intermediate business income showed, at the end of 2011, the intermediate business income of China’s banking industry accounted for only 19.3%. The rate of small and medium-sized banks’ intermediate business income was even lesser which is between 5% and 10%. These figures show that the present status of Chinese commercial banks’ intermediate business is far behind the level of banks in western developed countries. From my point of view, in order to evade the risks caused by interest rate liberation, commercial banks should make further changes to the following three areas, which are interest rate pricing, intermediate business and interest rate risk management capacity. Based on the current circumstances of China’s interest rate market and the comprehensive analysis of main problems commercial banks faced, this paper puts forward the countermeasures to strengthen the construction of the above three areas.