Interest Rate Market, China's Commercial Banks To Interest Rate Risk Prevention

Since twenty century eighties, the tide of economic integration and the financial liberalization has sweeped the whole world. Up to now almost all of countries in the world have completed the interest-rate marketization, which has promoted the development of world economy. The interest rate market-oriented reform has been pushed step by step in our country, but the interest rate level showed greater uncertainty and variability, and interest rate risk will become Chinese Commercial Bank's main risk.In this article, based on the background of interest rate deregulation, and by the standpoint of commercial banks, the author explains interest risk theory, and studies the types and the measurement of the interest rate risk. According to mature interest rate risk management experience of international commercial banks, the author studies the actuality of commercial banks'interest rate risk management in China, points out its deficiencies, and puts forward some suggestions on how to construct the interest rate risk management system.First of all, the author reviews the general history of interest rate deregulation in our country; Secondly, studies interest rate risk types of our commercial banks, and describes the four measurement of the interest rate risk; Thirdly, the author tries using the rate-sensitive gap model with the sample data of seven Chinese commercial banks from 2006 to 2009, to analyze the interest rate risk indicators, and points out its deficiencies; Finally, the author draws the conclusion and puts forward some suggestions.With the empirical analysis of commercial banks, the author concludes the long-term assets and long-term liabilities didn't match in the past years, and the commercial banks are facing serious long-term interest rate risk. The new joint-stock commercial banks are more flexible than large state-owned commercial banks in interest rate risk management, and large state-owned commercial banks rely on short-term deposits to support the long-term loans. Faced with these problems, it should be from both government and commercial banks to prevent and avoid interest rate risk. On one hand, government should create a favorable macroeconomic environment to prevent interest rate risk; On the other hand, commercial banks need to construct the effective interest rate risk management system.