Empirical Research On The Influence Of Interest Rate Marketization On The Profitability Of Chinese Commercial Banks

Interest rate is taken as the intermediary index of Chinese monetary policy transmission and an important lever of macroeconomics.Its level determines the development of China's macro-economy.In 1993,China established the basic idea of market-based interest rate reform,mainly based on the benchmark interest rate of the central bank,determined by the supply and demand decision of the capital market,and in June 1996,China officially implemented the reform of interest rate marketization.Stepped down the control on interbank lending rates.As of October 24,2015,the central bank lifted restrictions on deposit rates for commercial banks and other financial institutions.Since then,the central bank has fully liberalized interest rate controls,but it does not represent interest rate marketization.The completion of the reform.The size and nature of the banking industry determines that Chinese commercial banks play a key role in the financial market,and its main source of income is the difference between deposit and loan interest rates.In the stage of interest rate marketization,the deposit and loan interest margin is determined by the capital market,resulting in a great impact on the fixed profitability model of commercial banks.Competitive resources among peers have led to a further narrowing of deposit and loan interest spreads.With the development of the real estate market bubble in recent years,commercial banks have locked credit and increased real estate industry credit requirements,making the quality and quantity of credit services impossible to achieve high quality.In 2016,Alipay created a cashless payment method,which resulted in the rapid reduction of business volume such as deposits in commercial banks,and the sudden drop in transfer fees and remittance fees.In 2017,China's economic development was slow,and the overall development of commercial banks entered a deceleration period.Therefore,based on the continuous deepening of interest rate marketization reform,how commercial banks should seize opportunities,change the traditional fixed profit structure,and obtain sustained profitability become crucial.In the short term,the interest rate marketization leads to the narrowing of deposit and loan spreads of commercial banks and the decline in profitability.However,according to the proportion of non-interest income of commercial banks and income from intermediary business,it is understood that commercial banks are in a transitional phase and take the initiative.Changing the income structure and the traditional profit model.So from a long term perspective,the profitability of commercial banks will be enhanced,future sources of income will be stable,and absolute dependence on the level of interest rates in the capital market will be reduced.The main purpose of this paper is to find out what impact the interest rate marketization has on the profitability of commercial banks and to confirm the influencing factors,and to study the extent and direction of the specific impact of these factors,and finally put forward relevant countermeasures and suggestions.According to the purpose of this study,this paper is divided into five chapters.First of all,from the introduction part,the introduction part includes the background and significance of the topic research,research content and methods,innovation and deficiencies of the paper and literature review,including literature review Some of them include research status at home and abroad,and find breakthroughs for the innovation of this article;Then analyzes the profitability of China's commercial banks under the marketization of interest rates,and analyzes the downward trend of profitability indicators(asset yield,etc.)of commercial banks at the stage of interest rate marketization reform,and the credit risks are continuously increasing.After the elaboration of the mechanism of the interest rate marketization,we will introduce how marketization of interest rates affects the three aspects of commercial banks' net interest margin,income structure,and financial intermediation,which will in turn affect the profitability of commercial banks;and then select 16 listed commercial banks in the interest rate market.The data of the profitability indicators at the four time points in the accelerating phase were paired sample T-tests,and the test results were clearly marked.In order to obtain a specific degree of influence,this paper conducts panel regression analysis by constructing a comprehensive index of interest rate marketization and adding other control variables.At the same time,it uses a robustness test to further strengthen the impact of interest rate marketization on the profitability of Chinese commercial banks;Finally,the conclusions are drawn based on qualitative analysis and empirical regression results.The conclusions show that the interest rate marketization has a negative impact on the profitability of commercial banks.However,from the perspective of the influencing mechanism,interest rate marketization promotes changes in the income structure of commercial banks and the status of financial intermediaries,improves the stability of their profitability,and diversified businesses play a role in reducing the risk of commercial banks.This paper proposes relevant suggestions based on relevant conclusions,and believes that commercial banks should adopt measures to optimize the structure of deposit and loan principal business,maintain a reasonable level of net interest margin,accelerate the development of intermediary business,rationally expand the scale of assets,expand talent pools,and provide specialized financial services.