Research On The Correlation Of Narrowed Gap Between Deposit-loan Interesrt Rate And Performance And Risk

In order to adapt to the financial development and optimize the allocation of resources,China has started interest rate marketization reform since 1996. In July 20,2013, the loan interest rates of commercial banks in China are fully liberalised, which is a milestone in the process of intrest rate marketization in our country and is of great significance to the overall opening of interest rate of loan market. However, the market-oriented reform of interest rate in our country is relatively slow. It is mainly because that once the regulation of deposit interest rate is liberalised, the interest spreads of deposit and loan might be futher narrowed, which will reduce the net interest income of commercial banks, directly influence the performance of commercial banks, contribute to the forming of market and competitive mechanisms in our banking industry and expand the risk exposure of commercial banks, which will have impact on the risk of commercial banks and finally cause the turmoil in financial markets. For this reason, it is very necessary to study the influence of the narrowed interest spreads of deposit and loan on the management performance and operation risk of commercial banks. Therfore, this thesis aims to study the relation between the narrowed interest spreads of deposit and loan and the management performance and operation risk of commercial banks in the context of the marketization of deposit interest rate, providing suggestions for the healthy development of commercial banks in the context of narrowed interest spreads of deposit and loan.Chapter One reviews foreign and domestic stuides on the influence of the narrowed interest spreads of deposit and loan and interest rate maketization on commercial banks’ performance and risk. Chapter Two starts from the developing process of interest rate marketization to draw forth the perspective of narrowed interest spreads of deposit and loan. This chapter gives the definition of narrowed interest spreads of deposit and loan and analyzes the change of deposit and loan interest rates marketization and the reason of narrowed interest spreads of deposit and loan. Chapter Three and chapter Four respectively explore the current state of management performance and operation risk of commercial banks in the context of narrowed interest spreads of deposit and loan, and correlation between narrowed interest spreads of deposit and loan and management performance and operation risk of commercial banks. Chapter Five specifically selects the panel data of 14 listed commercial banks from 2005 to 2013 in China from an empirical perspective. It makes empirical analysis of the influence of the narrowed interest spreads of deposit and loan on the operation risk and management performance of commercial banks with the GMM model. It is found that narrowed interest spreads of deposit and loan will have negative impact on bank’s management performance while at the same time it reduces bank’s operation risk. In the context of narrowed interest spreads of deposit and loan, bank’s risk and performance have positive correlation. Under the circumstances of certain risk and with the improvement of macro-economic environment and the increasing level of income diversification, the management performance of the bank will accordingly increase. The last part puts forward responding suggestions for the management performance and risk management of commercial banks.