An Empirical Study On The Factors Affecting The Interest Rate Pricing Of Commercial Banks Under The Background Of Interest Rate Marketization

In October 2015,the People's Bank of China announced that it will no longer set ceilings for deposit interest rates for commercial banks and rural cooperative financial institutions,indicating that the interest rate liberalization reform was basically completed,also indicating that the interest rate liberalization has entered a perfect stage(post-interest rate marketization phase).In the improvement phase,commercial banks will usher in greater opportunities,but it also means that commercial banks may face greater challenges.The deposit-loan spread is still the main source of current commercial bank profits,and the reality that spreads,as the bank's main source of profit,will be difficult to change over a longer period of time.The reasonableness of the deposit-loan rate pricing will directly affect the business management,development prospects and competitiveness of commercial banks.In the stage of perfecting interest rate liberalization,commercial banks need to formulate scientific interest rate pricing strategies and form a scientific interest rate pricing model.The basis of these tasks is to clarify the main factors affecting bank interest rate pricing.This article starts with the perspective of the background of interest rate liberalization.Through comparative analysis,this paper analyzes the performance of commercial bank interest rates before and after interest rate liberalization.Based on the market model,through rigorous mathematical formula derivation,the factors affecting the optimal deposit-loan spread of commercial banks are analyzed.This paper uses the net interest spread as the proxy variable for deposit-loan rate pricing and selects operating costs,market competition,and risk respectively.The level of aversion,opportunity cost,and other factors were analyzed.Secondly,the financial data of 16 commercial banks listed on China's A-share main board during the period of 2008-2016 were selected as samples.The static item regression models and non-dynamic panel threshold models were constructed using Stata software for empirical analysis.The research shows that the influential factors chosen in this paper have a significant linear or nonlinear effect on the pricing of bank deposit and loan rates.Among them,this article confirms that the marketization of interest rates has compressed the bank's net interest margin,and that bank size,interest rate risk,and default risk have a nonlinear effect on banks'interest rate pricing.Finally,this paper proposes some suggestions for controlling costs,improving risk management,accelerating business transformation and implement the new regulatory framework.