The Empirical Study On The Impact Of Capital Account Liberalization On The Profitability Of Commercial Banks In Bric Countries

China has accelerated the pace of capital account liberalization since 2014.Thus,commercial banks face new challenges. BRIC countries are all developing countries. They have a similar industrial structure, industrial scale and other economic background.Moreover,the BRIC countries accelerated the pace of capital account liberalization in1990 s.By studying the impact of capital account liberalization on the profitability of the commercial banks in the BRIC countries,we can not only understand the capital account liberalization well,but also can understand the financial system of the BRIC countries well to provide effective theoretical and empirical evidence for further financial cooperation in BRIC countries.Capital account liberalization will affect commercial banks’ deposit and loan business through credit expansion effect, economic growth effect and international capital flow effect,which will then affect the profitability of commercial banks.The relationship between capital account liberalization and the profitability of the commercial bank are studied through an Panel VAR study.The results of the empirical analysis of sub samples supported that, the capital account liberalization is positively related to the profitability of the commercial bank in China and India. Because in the process of economic transformation,China and India do maintain the social stability and continue to implement the basic management functions,so that the market can play well. Otherwise,there are a group of excellent commercial banks in these two countries.On the contrary, the relationship is negative in Russia,Brazil and South Africa,partly because the economic liberalization process is too fast and excessive dependence on natural resources.Otherwise,they are weak in bank resources quantity and scale.Therefore,in the process of capital account liberalization,China should improve the banking system, and coordinate the relationship between fiscal policy and monetary policy.Finally, based on the empirical analysis conclusion and China’s current capital account liberalization we put forward four suggestions: promote the interest rate marketization,exchange rate reform and capital account liberalization gradually, avoid recommiting the same error in other BICK countries;Learning the lesson of Capital account liberalization in BRIC countries, optimize the order of capital account opening sub item;Speeding up the construction and development of monetary market,strengthen the control of capital flow control;Deepening the cooperation between BRICK countries,enhance the competitiveness of commercial Banks.