Interest Rate Risk Management Of Chinese Commercial Bank

The integrative economy and the liberal financial system were spread all over the world form the 1980s. Market-directed interest rate is one of the important parts of integrative economy, which means government abandons the power of managing it. In this way, the market interest rate is adjusted by supply and demand freely. With the facts proved that Market-directed interest rate could improve the interest rate level towered to real market rate, and helped unused money became deposit of banks. Finally, Market-directed interest rate will improve both the size and the quality of the investment.Resent years, the central bank of China released the interest rate and tried Market-directed especially from the day China became a member of WTO in 2001. With the "GENERAL AGREEMENT ON TRADE IN SERVICES" of WTO, China has to set up a Market-directed financial system and make it liberal within 5 years. The problem of how to control the interest rate risk is enlarged by Market-directed interest rate.The dissertation discusses the management of interest rate risk in the procedure of China's Market-directed interest rate both in theory and practicing way. First, it describes the procedure of Chinese Market-directed interest rate reform after giving the definition of it, and then discusses the 5 impactions in different areas. In next part, it finds that the situation of China's bank rate risk management is unpleasantable from 3 points. Then, it focuses on the methods of the interest rate's measurement and hedging bases on the real case analysis and logical speculating. The dissertation aims to give the necessary reference to China's commercial banks' interest rate risk management, especially in the financial reforming environment.