The Research On The Impact Of Interest Rate Liberalization On The Liability Business Of China Merchants Bank

Interest rate liberalization reform is the key of the financial system reform in China. China has already begun to reform the interest rate from 1990s. At present, the interest rate liberalization reform of China is in the final stage of promoting deposit rate liberalization, and the deposit rate liberalization will directly influence the liability business of commercial banks. Moreover, liability business of commercial banks is the basis of asset business and intermediary business, which has vital significance for the existence and development of commercial banks. Therefore, according to the liability business of CMB(China Merchants Bank), this article analyzes the impact of interest rate liberalization on the liability business of CMB from three aspects of the cost of liability, structure of liability and debt stability.At first, starting from the connotation of the interest rate liberalization, this article summarizes and expounds the theories of interest rate liberalization. Pointing out the transmission mechanism of the effect of interest rate liberalization on the liability business of commercial bank. The fully liberalized interest rate will influences on the cost of liability of CMB directly, makes CMB to change its liability strategy and structure of liability, and influences its debt stability.And then, this article analyzes the impacts of interest rate liberalization on CMB's liability cost, liability structure, and debt stability. When analyzing the influences on CMB's liability cost, this article utilizes quantitative analysis method to analyze the both long-term and short-term impacts of interest rate liberalization on CMB's liability cost. Pointing out that the interest rate liberalization has a significant effect on the liability cost of CMB.When analyzing the impact factors of CMB's liability structure, this article chooses HSBC as a reference because HSBC has growing up in an environment of abroad interest rate liberalization. In addition, a detailed comparison is made, from the two aspects of the liability category structure and liability term structure, which aim to point out the gap of liability business between CMB and HSBC, and to show some possible changes of CMB's liability business after interest rate liberalization.Also, in the analysis of the impacts on the debt stability, this article chooses the data of deposit rate and amount of deposit of CMB from Jan.2005 to Jun.2014. Additionally, calculating the correlation between the liability stability and deposit rate on the basis of CMB's deposit stability; consequently, the results demonstrate the impacts of interest rate liberalization on CMB's debt stability.Finally, this article provides some suggestions to deal with the interest rate liberalization, such as adjusting the liability category, optimizing the debt term structure, enhancing the pricing ability of liability products and further promoting the strategy of "One Body with Two Wings".