The Interest Rate Liberalization And The Interest Rate Pricing Management Of Commercial Banks

In recent years, more and more people want accelerate the marketization of interest rates, it is an ongoing process, and we can see that there is accelerating the trend. Interest rate marketization helps to solve the funding mismatch phenomenon, bring new opportunities for commercial Banks, but also brings a huge challenge to the traditional business model, the interest rate risk management ability and capital price management of commercial bank. If the interest rate marketization forward at full speed, since commercial Banks need to break through the traditional model of the development of loan business to adjust the credit structure. At the same time, interest rate marketization raises the interest rate risk, and tests the interest rate pricing management ability of commercial Banks. Western commercial Banks to adopt the method of the internal funds transfer pricing as the core method of the interest rate pricing management. In order to avoid interest rate fluctuations on the bank’s net interest income and net worth. Using perfecting internal funds transfer pricing method, can make the commercial Banks using the marketization of interest rate to adjust deposit and lending rates, avoid interest rate risk effectively.Marketization of interest rates for commercial banks is a double-edged sword, it will break the monopoly profits of financial institutions, reduce the deposit and lending spreads income, deposit and lending business competition in the market and in a short period for capital management ability is weak against large and small and medium-sized Banks. At the same time, the marketization of interest rates will also force the commercial Banks reform and perfecting funds management system, formulate rational pricing mechanism, improve the level of interest rate pricing, to raise their competitiveness. Among them, the internal funds transfer pricing and deposit and lending interest rate pricing ability is the key, this will determine the commercial bank development prospects after marketization of interest rates.Internal funds transfer pricing is an important tool for commercial bank interest rate risk management. Not only it provide the basis for bank deposit and lending pricing, but also changed the way of commercial bank interest rate risk management. After introduced the internal funds transfer pricing, it just like build a virtual capital market in bank. Due to internal transfer price can give consideration to term interest rate risk factors, therefore, it can separate the interest rate risk from the business department of internal transactions to assets and liabilities management department, realize the unified management by the assets and liabilities management department control interest rate risk, the deposit and lending services do not need to consider changes in the market interest rates and Banks’ assets and liabilities structure as a whole part.Chinese commercial bank loans due to the central bank interval control, independent pricing ability is weak, which determine the commercial Banks in China cannot copy the western mature method, should be based on China’s financial market development status and its pricing power design reasonable loan pricing methods and the loan pricing model. The four goals of Chinese commercial bank determines the bank must consider the cost of capital, risk control, customer maintenance, and its own assets and liabilities level four requirements on loan pricing, and with the core determine the loan pricing strategy.