The Impact And Countermeasures Of Interest Rate Marketization On The Profitability Of Commercial Banks

Interest rate marketization refers to the change of interest rate in financial market from government control to the decision of interest rate by various institutions in financial market.In essence,the dominance of interest rate is transferred from government to market.With the development of Chinese economy,the reform of interest rate marketization is imperative.Since 2012,Chinese interest rate liberalization reform has entered the stage of full liberalization.The People's Bank of China has expanded the floating range of deposit and loan interest rates many times,and the interest rate liberalization reform has begun to accelerate and deepen continuously.In 2013,the People's Bank of China completely abolished the control of loan interest rates.In 2015,the People's Bank of China raised the floating range of deposit interest rate many times,and finally abolished the floating ceiling of deposit interest rate,which represents that China has basically completed the market-oriented reform of interest rate system.This series of reform measures have a great impact on China's financial industry.Commercial banks are the most important intermediaries in the financial market,so the normal operation of commercial banks has a huge impact on the stability of the economic system.At present,among the profit sources of commercial banks in our country,the profit proportion brought by deposit-loan spreads is very high,while the interest rate marketization will reduce the deposit-loan spreads,which will have a huge impact on the traditional profitability of commercial banks in our country,thus bringing impact on the stability of the whole economic system.Therefore,it is indispensable to study how interest rate marketization affects commercial banks profitability.This paper mainly studies how interest rate marketization affects the profitability of commercial banks through case analysis,and puts forward relevant countermeasures.Firstly,the introduction introduces the research background,significance,content,research methods,innovations and shortcomings of the paper,and summarizes the domestic and foreign research literature on interest rate marketization.Secondly,the introduction of the case mainly includes three aspects: the basic situation of ICBC and the reasons for choosing ICBC as the case,the reform of interest rate marketization and its process,and the profitability of ICBC and its current situation under the reform of interest rate marketization.Then it is a case study.Firstly,based on the data of ICBC from 2009 to 2018,a linear regression model is established to verify whether the four factors can significantly affect the profitability of ICBC.Then,starting from these four factors,it deeply analyses how the marketization of interest rates affects the profitability of ICBC.Finally,the conclusions and Countermeasures show that the interest rate marketization reform has affected the profitability of industry and Commerce in many ways,resulting in the weakening of its profitability.On the basis of this conclusion,from the perspective of four factors,it provides corresponding countermeasures for commercial banks to solve the challenges brought by the interest rate marketization.