An Empirical Study On The Impact Of Interest Rate Marketization On Bank Systemic Risk

Since 1970 s,with the gradual development of financial market and the deepening of financial liberalization,it is imperative to reform the financial market,and the reform of interest rate marketization is the main content of financial liberalization.The economic background of China's public ownership economy as the main body and the speed of the development of financial economy determine the pace of interest rate marketization reform.We can learn from the experience of developed countries that interest rate marketization has widened the space for development.But it brings risks at the same time,so we should pay extra attention to risk supervision in the early stage of reform.The literature review of this paper is on bank systemic risk and interest rate marketization of both concepts and relations,expounds the current status of research,and then from the theoretical analysis of interest rates on bank systemic risk,theory analysis is from the perspective of individual banks,and then risk accumulates to the systemic risk of banks;in the empirical analysis,this paper Calculated the systemic risks faced by 14 listed banks in in the past 9 years.The method of CoVaR model and quantile regression are used.and then choose the net interest margin as a measure of the interest rate marketization index,and the choice of bank internal Factors and external economic environment factors as control variables of panel data multiple regression,empirical results show that interest rate marketization increases the systemic risk of banks.In order to further study the extent of its impact on the systemic risk of banks,This paper chooses the grey correlation degree analysis method to empirically analyze the influence of the interest rate marketization index on the systemic risk of the bank in all the selected indexes and its ranking.The result shows that the interest rate marketization has a grey relation to the systemic risk of the bank.The degree of association is basically above 0.7,All banks were ranked in the top 50 of all the factors that affected the selection.Through theoretical and empirical analysis,the marketization of interest rate can promote the systemic risk of banks.The marketization of interest rate really needs the banks to adapt constantly.The frequent fluctuation of interest rate brings challenges tocommercial banks,not only facing the risk of interest rate.Lower interest rates on deposits and loans have led banks to significantly lower their profits than before,causing various risks.There are a large number of examples of banking crises.Many countries finally returned to the era of interest rate control when the crisis broke out of control.Therefore,how to prevent the systemic risk is very important.This paper combines the theoretical analysis and the empirical results to prevent the systemic risk in the banking industry in the future.the policy of Macro and micro recommendations are put forward.