Study On Foreign Currency Loan Pricing Mechanism Of Chinese Commercial Bank

Loan pricing of commercial bank is based on their cost of funds, loan fees, loan risk, and profit objectives, combined with loan capital supply and demand market conditions, customer relationship, and other factors, integrated to determine the course of the loan interest rate. Loan pricing of foreign currency is the process of determine the interest rate of foreign currency loan by considering the impact of foreign currency loans of various internal and external factors. Foreign currency loan pricing mechanism is a process of standardization of the foreign currency loan pricing, scientific and effective institutional arrangements, is an important part of the commercial bank's products pricing mechanism.Reasonable and effective mechanism for foreign currency loans help commercial banks to adapt to the development of interest rate market, to improve the profitability, to accumulate experience for the RMB loan pricing, to improve the ability of bargaining. Therefore, it's important to study the pricing mechanisms of foreign currency loans.First, we learn from the western commercial bank loan pricing theory and practical experience, study the foreign currency loan pricing principles and methods. In the choice of pricing model, we should pay more attention to overall business relationship with customers, considering the overall contribution of customers, by researching the advanced theory and practice of the foreign currency loans, along with the banks and enterprises are getting closer. Meanwhile, we should be used other indicators to do performance appraisal, such as RAROC.Secondly, analyzes our foreign currency loan pricing mechanism of the development process, operation mode and characteristics. Meanwhile, we study the status of foreign currency loan pricing mechanisms and specific operating procedures deeply by a case study of banking. As China's economy increasingly close links with the global economy, more and more Chinese enterprises to go abroad, more and more foreign companies set up branches in China, China import and export trade volume increasing year by year, making the demand of foreign currency loans increase rapidly. Under the guidance of central bank, commercial banks start to strengthen the exploration of pricing. It's an objective reflection of operating status of the foreign currency loans pricing mechanism in A bank's case study. Compared with foreign practices, our construction of foreign currency loan pricing mechanism is still in its infancy.Finally, in evaluation and analyzes the current foreign currency loan pricing mechanism produce economic effects and the existing problems, based on the problems found, puts forward improving our country commercial bank foreign currency loan pricing mechanism suggestion. Foreign currency loan pricing mechanism had a positive effect in promoting the external development of Chinese enterprises, improving our competitiveness of commercial banks. However, there are a lot of issues, such as lack of awareness of scientific pricing, loan information and pricing decisions do not match, loan pricing and risk levels do not match, bargaining power is not strong.In order to further perfect our country commercial bank's foreign currency loan pricing mechanism, our bank must make a clear development strategy first, and create incentives for foreign currency loan pricing, take a unified information and pricing decisions, strength loan re-pricing cycle management, improve the information system and other measures to further improve the foreign currency loans pricing mechanism, enhance the construction of scientific pricing mechanism.