Study On The Impact Of Interest Rate Marketization On The Interest Spread Change Of Commercial Banks

In October 2015,the upper limit of deposit interest rate was liberalized,which shows that the reform of interest rate marketization in China has basically been completed,and the market competition is becoming more and more fierce.Therefore,the factors affecting the spread of commercial banks have changed.As the main source of income for commercial banks,interest margin changes will have a great impact on the development of banks and macro-economy.As far as the current domestic economic and social environment is concerned,what kind of impact will interest rate liberalization bring to the interest margin of commercial banks?What are the factors that have a tremendous impact on business?It is of great theoretical and practical significance to analyze and discuss such problems.Firstly,starting from theory,this paper studies the financial liberalization reform in mature markets,analyses the law of financial liberalization reform,puts forward corresponding enlightenment on how to better adapt to and digest the interest rate liberalization reform,and studies the trend of change and future development of China's Bank net interest margin in recent ten years.Then,the paper discusses the mechanism of interest rate marketization affecting the net interest margin of commercial banks,and finds that the relationship between interest rate marketization and net interest margin is inverted U-shaped from the perspective of deposit-loan spreads and competition,which paves the way for the following empirical analysis.Then,the degree of interest rate marketization in Clhina is determined,constructs an index system from both banking and non-banking levels,quantifies it,determines the weight of each index by analytic hierarchy process,and constructs an index of interest rate marketization as an agent variable to measure the degree of interest rate marketization in China.It is concluded that China's interest rate marketization reform has gone through four stages:initial test,continuous acceleration,steady progress and vigorous sprint.In the empirical analysis part,according to the micro-model of the bank company and the acceleration,steady progress and vigorousspr.In the empirical analysis part,according to the micro-model of the bank company and the principle of profit maximization,the pricing strategy adopted by the commercial banks is discussed.The cost function model is selected to deduce the influencing factors of market concentration and operation cos.Then other variables are selected from the macro-economic and banking levels.The data of 25 commercial banks in China from 2007 to 2017 are taken as samples.Descriptive statistics are used to analyze the reasons for the differentiation of the net interest margin.Then the static panel data model is established to regression with the net interest margin as the explanatory variable and the constructed interest rate marketization index as the main explanatory variable.Then it is divided into three types(city commercial banks,state-owned commercial banks and joint-stock banks)to carry out regression respectively,in.order to investigate the different nature of business.After testing the robustness of the model,a lag period of the explanatory variables is further introduced,and a dynamic panel data model is established to expand the analysis.It is found that the relationship between interest rate marketization index and net interest margin is inverted U-shaped,especially in joint-stock banks;operation cost is the main factor affecting net interest margin;market concentration,liquidity risk,credit risk,cost-income ratio and intermediate business income all have significant effects on net interest margin,while economic growth rate has some but not significant effects on net interest margin.Liquidity risk only has a significant impact on city commercial banks,but the impact of economic growth rate on state-owned banks is not significant,and other variables are significant for the three types of banks;in dynamic panel data model analysis,lagging variables have a positive impact on the current net interest margin,while the impact of liquidity risk becomes smaller,and the impact of credit risk changes from negative to positive.Finally,on the basis of the conclusions drawn from the empirical analysis',policy suggestions are put forward from the micro and macro aerspectives.