A Study On The Impact Of Interest Rate Marketization On The Performance Of Commercial Banks

The regulation of deposit interest rates was liberalized in October 2015,which means that the interest rate marketization reform of China had been basically completed.Interest rate marketization reform is the top priority in the financial reform.Commercial banks are the key part of the financial system,and its development is closely related to the overall development of the financial sector.The promotion of interest rate marketization inevitably brings great impacts on the operation performance of commercial banks.Dealing with the challenge brought by interest rate marketization is an objective problem that commercial banks should face at present.Therefore,it is quite necessary to research the impacts of interest rate marketization on the performance of commercial banks and provide corresponding countermeasures.This thesis firstly reviews the reform process of China's interest rate marketization,and then studies the mechanism and path by which interest rate marketization impacts on the performance of commercial banks from the aspects of interest rate spread effect,competitive effect and interest rate fluctuation effect,measures the marketization degree from 1996 to 2015 using direct and indirect indicator systems,analyzes the impact of marketization reform on the performance of commercial banks,and finally compares the impact of the reform on banks with different properties.The empirical results show that the interest rate marketization has a significant impact on the performance of China's commercial banks,and there is an inverted U-shaped relationship between the performance of commercial banks and the marketization of interest rates.Interest rate marketization has different impacts on banks with different properties:the inverted U-shaped relationship is remarkable with the non-state-owned banks and local banks,but is not remarkable with the state-owned banks and national banks.Based on these analyses,this thesis offers some suggestions for commercial banks to deal with the challenge of marketization reform,including promoting the reorganization of business structure,improving the efficiency of management,strengthening the ability to resist risks and so on.