The Influence Study Of Deposit Interest Rate Liberalization On Chinese Commercial Banks

Recently, the interest rate liberalization reform in China has a tendency to accelerate. In 2013, China has opened up the limitation of loan interest rates. Deposit rate liberalization reform is slower than the loan rate liberalization reform. In November 2014, financial institutions deposit rate limit has been adjusted to 1.2 times. The central bank solicits the opinions of the deposit insurance system to the society. Deposit interest rate liberalization can help to perfect China’s rate liberalization reform, to improve the efficient allocation of resources, to promote the reform of commercial banks. At the same time, deposit interest rate liberalization will increase the interest rate risk and influence financing of commercial banks. The research of commercial banks how to seize opportunities and avoid risks after the deposit interest rate liberalization not only has theoretical significance, but also has practical significance.In this paper, the theories include financial repression, financial deepening and financial liberalization of Ronald. I. Mckinnon and Edward. Shaw are the theoretical basis of the study. This paper analyzes the four major causes of our country’s deposit interest rate liberalization, and draws on the experience of three regionals deposit interest rate liberalization. The three regionals are the United States, South Korea and Latin America. And the article summarizes the foreign deposit interest rate market problems. Then, this paper describes the current situation and problems of China’s deposit interest rate liberalization, and analyzes the opportunities and challenges of commercial banks from deposit interest rate liberalization, and uses the banking data to analyze the earnings risk and interest rate risk. In addition, this paper uses the interest rate sensitivity gap model, profit targets and the data of interest rate differential to analyze the ICBC’s interest risk, profitability rate and its ability to innovate and mobility. Finally, this paper puts forward policy suggestions on commercial banks and government.