Study On The Impact Of Interest Rate Liberalization On The Profitability Of China's Commercial Banks And Countermeasures

Throughout the development and changes of interest rates in various countries,most of them have undergone the transition from regulation to deregulation.With the deepening of financial market reform in China,in order to meet the needs of financial and economic development,interest rate marketization reform has also begun.Although China's interest rate liberalization has developed late than many developed countries,the reform was basically completed in October 2015 with the steady and planned advancement.In the past 20 years,we can see that the reform of interest rate liberalization has gone from preliminary exploration to in-depth exploration.Today,it has an impact on the development of the financial market and even the whole economic environment,which also brings great opportunities and challenges to commercial Banks,the core part of the financial industry.On the one hand,under the market-oriented interest rate,the interest rate level fluctuates frequently due to the increase of inter-bank competition,which formed a great test for commercial banks which take the traditional credit expansion as the main profit model.Interest income decreases with the decrease of interest spreads of deposit and loan,the mode of increasing profits like expansion of high-cost and high-consumption assets scale is no longer applicable to the current market environment.How to break the unfavorable situation,improve the profitability and better development of commercial banks has become an urgent issue to be solved.On the other hand,the marketization of interest rates will force commercial banks to transform and upgrade,and provide a new direction for them to find new key points of profit growth and business development.Therefore,it is of great practical significance to study how commercial banks should grasp the opportunities brought about by the market-oriented reform of interest rates,adapt to the new environment,seek new breakthroughs and achieve new development.Based on this,this paper takes the data of 16 listed cormercial banks from 2007 to 2017 as the research object,comprehensively considers the most influential factors on the profitability of commercial banks,and finally chooses seven indicators as research variables,such as the return on total assets,net interest margin and GDP growth rate,to conduct regression analysis of the overall and Banking classification.In order to explore how interest rate marketization affects the profitability of different commercial banks through these variable factors,and analyze the huge differences of the influencing factors of different types of commercial banks'profitability,and the problems of the reasons for these differences.Finally,it puts forward countermeasures and suggestions for different types of commercial banks in China.On the whole,commercial banks should attach importance to the traditional interest income business,but improve the level of non-interest income;the positioning of large commercial banks is comprehensive and intermational commercial banks;joint-stock commercial banks need to establish the development strategy of differential operation;and urban commercial banks need to take the road of characteristic operation and development.