The Interest Rate Liberalization Impact On The Profitability Of Commercial Banks

Interest rate is the core of modern economy and finance, interest rate movements can affect a country’s capital and money markets, causing a huge impact on the economy of the whole country, and so the extent of the interest rate market is also an important criterion to judge a country’s stage of economic development. From the reform and opening up to date, the extent of the interest rate market is growing. 2013 all financial institutions deposit rate liberalization, China’s interest rate reform into the deep water, which brings to the commercial bank interest rate risk is becoming increasingly apparent. This article collects relevant literatures, to expound the importance of the interest rate market and China’s interest rate market history. Ten selected statistics listed banks, using a variety of financial indicators of the profitability of commercial banks currently can perform analysis, the profitability of the five state-owned commercial banks are generally worse than other non-state-owned joint-stock commercial banks. Opportunities and Challenges for the interest rate market to commercial banks may be summary and conclusion. In this paper, the method of stress testing, after the interest rate market risk, interest rate fluctuations that may occur to commercial banks, the test result is quite satisfactory, ability and strong profitability of the bank has a strong fight against fluctuations in interest rates, poor profitability was banks’ ability to resist the interest rate risk is also poor. Finally according to the status and operation of commercial banks stress test results presented in favor of the development of the banking feasibility proposal.