The Choice Of Commercial Banks Behavior Basing On Interest Rate Marketization

In recent years,China's economic growth is slowing,and development of commercial Banks is facing enormous challenges,while the marketization of interest rate for commercial banking system in China has brought new challenges and opportunities.Interest rate marketization can give investors and depositors more returns,as well as expanding and increasing the source of funds of commercial Banks,which can be helpful for commercial Banks to increase debt scale,enhance competitiveness.However,the interest rate marketization may also reduce the operating profit rate of commercial banks and increase the level of non-performing loans,which has a negative impact on the development of the banking industry.Under the circumstances,it is of great practical significance to study the impact of interest rate marketization on the behavior choice of commercial banks and to put forward the policy recommendations of risk prevention.At first,this paper analyzes the influence of interest rate marketization on the behavior choice of commercial banks by using the theory of monetary economics.Then,based on the sample data of 16 listed commercial banks in China since 2008,the vector autoregressive model is constructed.Total quantity test(Treating all commercial banks as a whole)and component testing(dividing commercial banks into different types)are tested from five aspects:bad loan ratio,credit amount,loan-to-deposit ratio,interest rate yield and capital adequacy ratio.The results show that the marketization of-interest rate has a great impact on the behavior choice of commercial banks,which not only reduces the profit level of commercial banks,but also increases the operational risks of commercial banks.Based on the conclusion,we put forward some suggestions on how to reduce the financial risk,strengthen the financial supervision and improve the internal risk control of the bank.Furthermore,based on the current financial development,this paper puts forward policy recommendation that the commercial banks can use the innovative mode of Internet finance to hedge the negative impact that interest rate marketization will bring.The innovation of this paper is as follows:Firstly,the vector autoregressive model is established,and the influence of interest rate marketization on the behavior choice of commercial banks is studied from the different dimensions of total quantity test and component test.Secondly,based on the empirical results,this paper puts forward the relevant policy suggestions of commercial banks to deal with the impact of interest rate marketization.At the same time,according to the current development of Internet finance,this paper puts forward the recommendation that commercial banks should transformat timely and make use of the innovative mode of Internet finance to adjust to the market influences.The shortcomings of this paper are as follows:as a graduate student who is studying at a Master degree,my theoretical analysis is limited,and the financial environent changes everyday.The analysis of the behavioral choice of commercial banks can be further improved and I will continue to study in the future.