Analysis Of The Impact Of The Deposit Insurance System On The Operating Efficiency Of China’s Commercial Banks Under The Background Of The Interest Rate Liberalization

For more than a decade,the market reforms in China’s financial sector have been as hot as tea.The most notable ones are the interest rate liberalization and the deposit insurance system.These reforms have had a profound impact on China’s financial institutions,especially commercial banks.Based on the law of the The People’s Bank Of China,which came into force on july 1,2007,this thesis analyzes the positive and negative effects of the interest rate liberalization and the deposit insurance system on China’s banking industry,and illustrates the relationship between the two systems through empirical tests.Studying the effect and impact of these two reforms on commercial banks can confirm whether the original intention of the reform has been fully realized,and also find out the problems and suggestions that should be paid attention to in the subsequent reforms.In this thesis,the author takes 42 commercial banks in China as the research object by combining theoretical and empirical methods,and analyzes the commercial banks with different property rights and sizes.It is found that the interest rate liberalization will negatively affect the operating efficiency of commercial banks,while the deposit insurance system,on the other hand,will help improve the operating efficiency of commercial banks.Based on the heterogeneity of commercial banks,this thesis also draws different conclusions:The deposit insurance system has significant positive and negative effects on large state-owned commercial banks and city firms respectively,and not on shareholding banks,and interest rate liberalization has significant negative effects on shareholding banks and city firms,and not on large stateowned commercial banks.On this basis,the reasons are further discussed.Finally,in the light of the above results,the corresponding policy recommendations are put forward.Finally,the thesis puts forward that China’s commercial banks should define their own market position and take the road of differentiated development.