The Influence Of Interest Rate Marketization On The Stability Of Urban Commercial Banks

After the outbreak of the economic crisis in 2008,the community generally recognized that stability management plays a more and more important role in the management of banks.With the further liberalization of the financial market,maintaining the stability of the bank has gradually become the focus of its management..Compared with the large commercial banks,the urban commercial banks have relatively small scale,less competitiveness,lacking of internal interest rate risk prediction and prevention mechanism construction,so the process of the interest rate liberalization will have bigger impact on urban commercial banks.In order to make the city commercial bank can get better development,this paper analyzes the influence of interest rate marketization on the stability of urban commercial banks based on the perspective of stability of urban commercial banks.In this paper,we use the panel data of 20 urban commercial banks during the period 2008 to 2014 in China,firstly established the evaluation system of the stability to measure it,then constructed the fixed-effect model of stability-interest rate liberalization.The empirical results show that deposit interest rate marketization,economic sentiment index,market-oriented interest rate of loans,operating cost rate,rateof economic growth and economic sentiment index are significantly correlated with the stability of urban commercial banks.Among them,deposit interest rate marketization and economic sentiment indexhave positively relationship with the stability of urban commercial banks,which means that the smaller deposit loan difference and the lower confidence of entrepreneur,the worse stability of urban commercial banks.Others indicators have negatively relationship with the stability of urban commercial banks,which means that the promotion of loan interest rate market,the improvement of operating cost and the ascending economic environment will reduce the stability of urban commercial banks.Through literature review and empirical research,this paper proposed several suggestions on the management of city commercial banks:(1)Urban commercial balks must change their own competition pattern,develop intermediary business more actively to achieve the goal of incoming sources diversification.(2)Urban commercial banks should pay more attention to the market and reduce the spending of operating expenses to improve their competitiveness with big banks.(3)The regulatory authorities shall establish corresponding facilities and take corresponding measures to maintain the stability of urban commercial banks.