The Effect Of Interest Rate Liberalization On The Risk Taking Of Commercial Banks

The essence of rate liberalization is that interest rates are determined by that the demand and supply of market funds.Financial institutions independently decide the interest rate of savings and loans.On one hand Interest rate liberalization strengthens the independent decision of financial institutions,it is be neficial to optimize the allocation of resources and promote economic development.On the other hand,the interest rate liberalization will enhance the competition,aggravate the fluctuation of interest rates,increase the risk of banks,and then affect th e risk bearing level of the banks under the long-term interest rate regulation mechanism in China.Therefore,Base on the perspective of "double track mechanism”,the paper studies that the impact of interest rate liberalization on the risk bearing of comm ercial banks in China,which has certain practical significance.In view of this,the paper first analysis of the interest rate liberalization mechanism of commercial bank risk based on introduction the background of interest rate liberalization.Then analysis of the lending rates and deposit rates turn” plan track" to "market track" what impact on commercial banks the risk,Meanwhile considering the influence of the different nature of the equity relationship.The last,the comprehensive consideration that the money market,bond market,credit market and direct factors and indirect factors base on the commercial bank data of 2007-2016 years.we demonstrate that the influence of interest rate liberalization on the risk taking of commercial banks and The response of a qualitative commercial bank to the sensitivity of the impact of interest rate liberalization By using the system GMM model.The study found: the liberalization of interest rate and bank risk was decreased and then increased inverted "U" relationship.The reaction of commercial banks with different properties is heterogeneous in the face of the impact of interest rate liberalization,of which the state-owned commercial banks are most sensitive,followed by non-state-owned commercial banks.Based on the research conclusions,the paper puts forward relevant policy suggestions that the development of intermediary business,the implementation of government differential supervision of banks,and the relaxation of the entrance threshold of foreign banks.