The Research Of Commercial Bank Profitability Under The Background Of Interest Marketization

Interest rate marketization is an important aspect of financial reform.At present,the economic development of China financial market continue to deepen, the control of interest rate is no longer suitable for smooth and healthy development of the economy in our country.So,the marketization of interest rate is very important to the economic development of China. Foreign developed economies,such as the United States market,and the Japanese market,they began interest rate marketization reform in the early 1980s, and have complete interest rate marketization reform. They both become a mature financial market finally.In advancing the process of interest rate liberalization, the banking industry,as the backbone of the entire financial industry,facing the impact of the interest rate marketization,will change a lot.In the marketization,The interest rate spreads of American Bank fall from 6% in 70s to 5% in 80s. At the same time, the composition of deposits also changed,The rate of current deposit decreased,and the rate of saving deposits increased.The banks began to strengthen its management of assets and liabilities,banking has changed from separate operation to mixed operation. Throughout the United States banking,the behavior of bankruptcy and mergers occurred,finally the amounts of commercial Banks fall into 2/3. At the same time, Japan’s Banks also faced the process of marketization of interest rate,In the process of the marketization of interest rates boost, with the continuous decline of the Japanese economy,it lead to many Banks went bankrupt,and lead the Japanese economy into recession.As the guide of the developed countries, market-oriented interest rate has a significant impact for an economy’s banking sector. At present,our country is promoting the process of interest rate marketization, more attention must be pay to the impact that the bank faces.The reform of China’s market-oriented interest rate can be divided into three stages.1993-2011:the steady progress of interest rate liberalization.In the past 20 years, The marketization of interbank market interest rate,foreign currency lending rates and bond market interest rates have basically completed.At the same time,the renminbi inter-bank savings rates also gradually released,the floating region of deposit and lending rate also gradually released.2012-2014:the interest rate marketization accelerating. After the eighteenth national congress, the state has issued a series of reform measures, the floating range of deposit and lending rates continue to increase,a deposit insurance system has been issued. This series of actions shows the urgency and the determination of our government to promote the marketization of rate.2015:the end stage of interest rate liberalization. In May 2015, our country has entered the stage of interest rate marketization,actually deposit rates has expanded to 1.5 times to the benchmark interest rate.Under such broad range has,banks can independent pricing.Essentially,banking industry has entered the interest rate marketization.The advancement of marketization of interest rate brought a very profound influence for the entire financial environment,particularly for the commercial Banks.For a long time, China’s commercial Banks are the main participant of social financing.The loans of our bank accounted for more than 90% of the total social financing when our country did not promote the marketization of interest rates.At the same time,depending on the national policy support,China’s commercial Banks have been in a monopoly position in the industry,banking industry also grew at about 20% every year.In such a favorable situation, China’s commercial Banks enjoyed a higher return rely on the spreads of loans and deposits and the rapid growth of assets. But along with the advancement of marketization of interest rate,the advantages of the banking industry gradually disappeared,the spreads of loans and deposits shrink,the growth of bank assets slowed,other social financing constantly eroded the proportion of bank loan in the total social financing,and the operating risk rose up.In a word, The advancement of marketization of interest rate brought a large impact on the development of the banking sectors.The main content of this paper is to analyze the impact of interest rate liberalization for China’s banking industry,and the way to face the impact The paper specific studies on the profitability of the Banks as the breakthrough point, combined with the experience of developed country and our own domestic situation.First of all, we analyze the affect for some factors,as the bank lending and deposit interest rate spreads, non-interest income proportion, growth in bank assets and bank loans in total social financing.On this basis,we analyze how the marketization of interest rate influence the profitability of commercial Banks.The structure of this paper is as follows.First,we introduce the theoretical foundation of the marketization of interest rate, analyze the reasons and importance of interest rate marketization in mature economies. Second,we introduces the developed economies of the United States and Japan,respectively introduce the situation of interest rate marketization process in the two countries, and the impact for commercial Banks.On the basis of the analysis of foreign experience,we introduce the process of our country marketization of interest rate,and analyze the effect of interest rate marketization for China’s commercial Banks.Then,Panel model is established,we quantitative analyze the influence of interest rate marketization for China’s commercial Banks,according to the regression model,we get appropriate conclusions, and put forward relevant countermeasures to cope with the effects of the market-oriented interest rate for commercial Banks in China.