The Financial Management Of China’s Policy Banks Under Interest Rate Marketization

The Interest rate marketization process in China has accelerated in the past few years, in July 19,2013, the reform of interest rate marketization in China took an important step, The People’s Bank of China decided the full liberalization of financial institutions lending interest rate control in July 19,2013. The reform this time includes:Cancel the RMB loan interest rate lower limit except Individual housing loans; Rural credit cooperatives’loan interest rates no longer set 2.3 times the upper limit; lift the restriction of rediscount rate on bill discount rate, Produce a far-reaching impact on the development of the banking. In the short term, interest rate marketization will bring banking significantly increased financing costs, financing costs rise and the fall of the loan interest rates, the profit space of banks will be greatly narrowed, the banking will face enormous financial management pressure. The policy banks are special in China’s banking industry, and they all set in 1994. After 20 years development, its asset size, social role and influence has increased. So it has theoretical and realistic significance to study the financial management of policy banks under interest rate marketization.This paper is divided into five parts to go on. The first part is the introduction, this part mainly discussed the background and significance of studying the financial management of policy banks under interest rate marketization, also introduced the function of policy banks and their financial management, their business sphere, it pointed out that the policy banks totally belong to the government and it’s their duty to cooperate with the economic development and social policy. Their Financial management is different from commercial banks. Besides, this part introduced the Innovation and deficiency of this paper. The second part is the Summary of the financial management of policy banks, it introduced the characteristics of domestic and overseas policy banks, it also combed the contents and characteristics of the financial management of policy banks. The third part is the opportunity and risk of policy banks’financial management brought by the interest rate marketization, With the method of quantitative analysis,the qualitative discussion and the vertical and horizontal comparison, this part put forward that with the in depth interest rate marketization, the policy banks will meet risks, but at the same time will also encounter the opportunities like the widen of credit spreads and the weakening of financial disintermediation. The forth part is how to enhance the financial management of policy banks. This part suggested that policy banks should strength internal control and the management of interest rate risk, speed up financial innovation to cope with the risks brought by the interest rate marketization. The fifth part is the conclusion and prospect, Through the review of the whole, it concluded that if the policy banks can catch up with the opportunities brought buy the interest rate marketization and take initiative measures, the policy banks can not only resist the impact of interest rate marketization, their financial management will be improved.