The Research On The Impact Of Interest Rate Marketization To Bank Of China's Asset Business

McKinnon and Show put forward the theory of financial repression and financial deepening theory in the 1970s.The developing countries need to give up the control of interest rate to eliminate financial repression and perform the financial deepening reform based on the interest rate marketization. The theory has been paid attention to and applied by many countries and regions. China has liberated its interbank interest rate in 1996 as its first step to interest rate marketization. China's interest rate marketization reform has gone into the sprint phase in an all-round way in recent years after more than ten years reform and exploration. The reform also had a profound impact on commercial banks' assets business. It is no doubt a big challenge to our country's commercial banks that how to cope with the challenges of interest rate marketization reform. It is necessary to research on the influence of interest rate marketization to our country's commercial banks business before further interest rate marketization reform considering of the importance of the commercial banks in the financial system in our country.The paper aims to study the impact of interest rate marketization reform to Bank of China's asset business and put forward some suggestions for Bank of China dealing with the interest rate marketization reform. At first, the research angel of the article is about the assets business of the Bank of China. The theoretical basis of the paper covers the theory of interest rate marketization and the commercial bank asset business management theory. Then, using the Game theory model to analyses the mechanism of interest rate marketization's impact on commercial Banks'assets business. The analysis of Bank of China's assets business mainly includes the scales, structures, risks and earnings. Conclusions summarized from Game theory are verified by case analysis basically. The interest rate marketization will make the competition between commercial Banks'assets business more drastic; Interest income gradually narrowed; Return on assets will be influenced by interest rate fluctuations. The interest rate risk and liquidity risk the assets business faced will increase. On the other hand, Interest rate marketization allows Bank of China to expand the asset business autonomy and improve the ability of loan pricing. The assets structure of Bank of China also has been optimizing adjusted in a certain degree. The proportion of credit assets and the quality of the assets have been improved.At last, basing on the above research results, we put forward some strategies for Bank of China's assets business to deal with the interest rate marketization reform. First of all, we need to make the top-level design for assets business to deal with interest rate marketization. Then to build financial products pricing system and improve the capacity of pricing. To optimize assets structure adjustment and improve the capacity of interest rate risk control and management. To promote the assets securitization. From these five aspects, we are looking forward to providing a targeted, scientific theoretical support and policy reference for Bank of China to keep ahead in the competition of interest rate marketization reform.