The Impact Of The Central Bank Interest Rate Control On Bank Interest Spreads:an Empirical Evaluation

With the commercial bank China data as sample data, this paper research the influences of Chinese commercial bank’s benchmark rate on the bank net interest margins under the marketization of interest reform,which is based on the related theories.On the marketization of interest rates the central bankinterest rate on the net interest margin, the comparison of influences of the central bank interest rate for the large state-owned commercial banks and joint-stock banks profitability is different. This paper discusses the relationship between the profitability of banks and the central bank interest rate of interest rate with the microcosmic level. Through the comparison of the large state-owned commercial banks and joint-stock banks empirical results,the paper analyse the important influence of Chinese market-oriented reform of interest rates of commercial banks.Under the theory of market model,this paper research the theory of interest and bank net interest margin, analysis the significance of central bank interest rate, using the way for the empirical test. In the empirical analysis, this paper is about16major Chinese banks from2000to2012, which includes5large state-owned commercial banks and11joint-stock banks.All banks are panel analysis, using fixed effect model, the effectdegree and influence of the central bank interest rate on the net interest margin,analysis of macro factors economic growth, money supply leveleffect on net interest margin. The results show that there is a two-way interaction, complex between the central bank interest rate control andCommercial Bank net interest margin, compared with joint-stock banks, the central bank interest rate control on large strong state-owned commercial banks joint-stock banks affected by the degree of central bank interest rates low. China is in a complex situation with the interest rate liberalization step by step, financial market further opening, Chinese bank need to size up the situation, reasonable transformation,ready to meet the domestic and foreign financial institutions to deal with theimpact, the current complex economic situation.