The Impact And Countermeasure Study Of Four Major State-owned Banks Performance Under Interest Rate Marketization

With the development of financial reform in our country in recent years, the interest rate marketization has become a hot spot which scholars pay attention to. China launched the reform of interest rate marketizationin in 1996, and since then the reform has been processing steadily. At present, China’s interest rate marketization reform is coming to an end. Bond market, monetary market, lending rates and deposit interest rate lower limit have gone. The only remaining limit is the deposit interest rate upper limit. On February 28, 2015, the people’s bank of China changed financial institutions deposit rate upper limit from 1.2 times to 1.3 times, along with the deposit insurance system, the last step of interest rate marketization reform in our country is coming.In this situation, commercial banks will suffer huge changes in management environment, along with our country’s economy enters the “new normal”, economic growth slowing down and non-performing loans increasing sharply, all commercial banks generally feel great pressure. Four major state-owned banks occupy the nearly half of the industry. Their performance in the reform will be directly related to stability of the financial system and the success of the reform in our country.This paper discusses the impact of interest rate marketization on four major state-owned banks combining theoretical and empirical methods.Firstly, the interest & the interest rate maketization and the performance of commercial banks theories are explained. At the same time, relevant research literature are reviewed.Secondly, the process of interest rate maketization and the current situation of four major state-owned banks are introduced, which is a foundation for the analysis.Thirdly, based on Chapter 1 and Chapter 2, this paper explores the impact of interest rate marketization on four major state-owned banks by the qualitative analysis, which divided in 3 aspects: competition among banks, credit risks, rate risks.Then, this paper choose quarterly data from 2006 to 2013 of four major state-owned banks to explore the impact of interest rate marketization on four major state-owned banks by the quantitative analysis. In order to explain the impact clearly, the data of 7 joint-stock banks are introduced. The results shows that interest rate marketization has significant effect on the performance of commercial banks and the influence on joint-stock banks is bigger.At last, based on the analysis above, this paper offer the proposal in basic strategy, internal strategy and external strategy for four major state-owned banks.