The Determinants Of Net Interest Margin In Chinese Commercial Banking System Under The Background Of Interest Rate Liberalization

In recent years,China has started the market-oriented reform of the deposit and loan interest rate of the Chinese commercial banking system,and has given the decision on interest rates to the market.It does not set benchmark interest rates and floating ranges for commercial banks’ deposit and loan interest rates.Compared with the traditional interest rate control,commercial banks have fixed deposit and loan spreads.With the advancement of interest rate marketization,commercial banks have intensified the intensity of competition in the deposit market and the loan market.The fixed deposit and loan of commercial banks The difference will no longer exist,further reducing the deposit-loan spread of commercial banks and reducing the intermediary costs of commercial banks.Based on the special background of interest rate marketization,this paper wants to study whether the interest rate marketization policy will have an impact on the net interest margin of commercial banks,whether it will reduce the profitability of commercial banks,whether it will enhance the competitiveness of commercial banks,and whether it will transform business.It has an impact,so this paper studies the factors affecting the net interest margin of commercial banks.Firstly,this paper analyzes the composition of the Chinese banking system.The Chinese banking system is mainly divided into four major parts,namely state-owned large commercial banks,joint-stock commercial banks,city commercial banks,and rural commercial banks.The study found that the number of commercial banks in China has shown a rapid upward trend in recent years,and the level of competition has been continuously strengthened.However,the industry concentration of the banking system is quite high.The assets of state-controlled commercial banks account for 100% of the total assets of the Chinese banking system.More than 70%,there are oligopoly within the banking system.At the same time,this paper sorts out the process of China’s interest rate marketization.The study finds that China’s interest rate marketization reform has gone through three stages: the initial promotion of interest rate marketization reform,the interest rate marketization reform has made important progress,and the interest rate marketization reform has been completed..After reviewing the process of China’s interest rate marketization reform,this paper measures the degree of interest rate marketization in China from 2010 to 2016.The study found that the degree of marketization of interest rates in China from 2010 to 2016 is an increasing process.Then,this paper constructs a model of the influencing factors of the net interest margin of Chinese commercial banks,and incorporates the interest rate marketization index into the market model to measure the impact of interest rate marketization policies on the net interest margin of commercial banks,and derives the net of commercial banks.The relationship between spreads and operating costs,risk aversion,interest rate risk,credit risk,and market structure.Subsequently,this paper verifies the conclusions of the theoretical model from an empirical perspective.This paper will carry out regression analysis from the 2010-2017 data of China Commercial Bank System collected from Wind Database,Guotai’an Database and Commercial Bank Financial Statements,further verifying the conclusions of the theoretical model and verifying the interest rate market policy for commercial banks.The impact of the spread.Finally,the research of this paper draws six main conclusions: First,the interest rate marketization policy reduces the net interest margin of commercial banks;second,the net interest margin of commercial banks is positively related to monopoly power;third,the operating costs of commercial banks will increase.The net interest margin of commercial banks;Fourth,the degree of risk aversion of commercial banks is positively related to the net interest margin of commercial banks;Fifth,the degree of decentralization of commercial banks is negatively correlated with the net interest margin of commercial banks;The impact on unlisted commercial banks is even greater.In view of the problems existing in the Chinese commercial banking system,this paper proposes the following policy recommendations from the perspectives of the government and commercial banks: First,the government should vigorously support the development of joint-stock commercial banks,vigorously develop urban commercial banks and rural commercial banks,and actively promote China.The deepening and improvement of the interest rate marketization policy will further enhance the competition level of commercial banks and improve operational efficiency.Second,commercial banks should strengthen credit risk control,reduce non-performing loan ratios,continue to explore new businesses,and expand revenue sources.