The Impact Of Interest Rate Liberalization Upon Business Scales Of Chinese Commercial Banks

After many years of exploration,our country's interest rate liberation progress has been completed.Interest rate liberalization first appeared as an optional policy in the document formed by the Third Plenary Session of the 14 th CPC Central Committee.From 1997 to 2011,many financial rates were gradually liberated.Interest rate liberation entered the core stage in 2012,and the whole process finished in October 2015.This research focused on the impact of interest rate liberalization on the business sizes of deposit service,loan service,inter-bank market and wealth management.When studying each problem,I divided the banks into three categories by size as four big banks,other big banks,and middle and small banks.After reviewing previous papers,this paper used qualitative method to analyze how the liberation process influenced commercial banks' deposit,loan,inter-bank and wealth management's business scales.Then we came up with four main research hypothesizes.After that,we built up interest rate liberation index based on former researches and related policies,and used data from 20 listed Chinese commercial banks from 2007 to 2016 to conduct empirical analysis.According to the empirical results: Big Four were not seriously impacted by the liberalization.Other big banks' deposits and net inter-bank outflows increased seriously,while loan scales decreased seriously.Middle and small banks' deposits,net inter-bank outflows,and wealth management scales increased seriously,while loan scales decreased seriously.The results matched our theoretical analysis.