The Relation Analysis Of Central-bank Benchmark Spread And Performance Of Commercial Bank

As the core of the financial system, the performance of bank not only directly affectsits own operating conditions on the microcosm, but also affects the optimal allocation ofsocial capital in the macro. Because commercial banks of China came from the plannedeconomy system, they have become accustomed to relying on favorable policy for excessprofits. The traditional profit pattern of banks, which considers loan-deposit interestmargin as the main source of income, remains unchanged. To achieve themacro-economic control target, central bank adjusts loan and deposit rates frequently bycountering the economic conditions. The benchmark spread based on the benchmarkinterest rate which is the important tool of regulating and controlling national economyaffects the performances of commercial banks deeply.Firstly, this paper introduced the relating theory about interest margin and bankperformance, and performed qualitative analysis of the mechanism that benchmarkspread had effects on bank performance. Secondly, by constructing the index system inperformance evaluation and using factor analysis method, the article made outcomprehensive evaluation of16commercial banks’ performance from2007to2011, andthen regarded the final scores as the dependent variable. And again, this thesis made theregression analysis of the correlation between benchmark spread and bank performanceby using the panel data model of econometric method. The results showed that influencevaried with the ownership of the nature, for the state-owned commercial banks, there wasa significantly negative correlation between them, but for the non-state-ownedcommercial banks, influence between them was not significantly positive. To clarify thereasons of the differences, this article carried on the thorough analysis. With thetheoretical analysis, it was found that the changes in different direction between the performance of state-owned and non-state-owned commercial banks resulted from thedifferent fluctuation velocity in net interest income and non-interest income. With theempirical analysis, it was found that the significant difference between state-owned andnon-state-owned commercial banks was caused by the changes in net interest income.And they explained the empirical regression results together. Finally, according to theresults, this thesis put forward some corresponding suggestions.