Study On The Determinants Of Optimal Interest Rate Differentials Of Chinese Commercial Banks

The general definition of Net Interest Margins is that commercial Banks pay higher Interest on loans than they earn on deposits.The net profit margin of commercial Banks can reflect the operating efficiency of the bank itself,as well as the transaction cost and efficiency of social indirect financing subject.In academic circles,the research on the determinants of the net profit margin of commercial Banks has always been the focus,and there are many differences.In 1981,Ho and Saunders,the commercial Banks to carry decision model is put forward first(referred to as "H-S model),pioneering bank will face the risk associated with net interest margin,the determinants of commercial bank's net interest margin research laid the theoretical basis.Later scholars have continuously revised and supplemented the modeling ideas of h-s,and conducted various empirical tests on various influencing factors.Up to now,the commercial bank spreads decision model has introduced the maturity mismatch mechanism,interest rate liberalization and other more complicated factors.Therefore,this paper adopts the commercial bank spread decision model to study the main determinants of the net profit margin in China.This paper mainly studies the Chinese commercial Banks profit utility maximization under the condition of the optimal spreads determinants of commercial bank shall build and derived respectively and spreads across the deadline of decision model,based on previous studies,on the basis of present situation of China's banking sector,innovation introduced loan datum interest rate differentials,intermediary business,trade business and risk factors such as the control coefficient,using the dynamic optimization principle is deduced under the commercial bank profits maximize utility optimal spreads decision formula,and then analysis the following factors:Market competition structure,average operating costs,risk aversion,interest rate risk,credit risk,the intermediate business scale,trade business scale,loan datum interest rate differentials,risk control level,keep the opportunity cost of reserves,the bank management,term premium and liquidity mismatch index such as the deciding factor.Finally,two groups of conclusions reached from the results of the model,the commercial Banks to develop intermediary business and duration matching net interest margin wrong a group have the opposite effect: "the innovation cost effect" and "innovation risk effect";"Cost effect" and "risk effect".In this paper,the empirical variables based on the above theory,namely for commercial Banks to single term and cross term spreads decision model is deduced by the determinants,selecting 2003 2003-2015,China's domestic commercial bank earnings data,establishing various determinants of proxy variables,and estimates the liquidity of China's80 commercial Banks index mismatch.Dynamic panel model is set up,in view of such a "small big N T" type using the unbalanced panel data empirical endogenous,heteroscedasticity,the problem of serial correlation and the influence of weak instrumental variable,this paper adopts a more optimized estimation method,system GMM method,through the regression of the sample data,the decision of the theoretical model of all factors in the empirical test,and verify the cost of "innovation effect" and "innovation risk effect","cost effect" and "risk effect" of existence and the size of the effect.The conclusion is that the overall "risk effect" effect of China's banking industry is greater than the role of "cost effect" and "innovation risk effect" is greater than "innovation cost effect";The bank management level(MANA cost income ratio)has a significant negative correlation with the net profit margin of the bank;Big state-owned Banks have big "risk effect" and "innovation cost effect".Finally,the paper puts forward corresponding countermeasures and Suggestions.