Analysis Of The Influence Of Interest Rate Liberalization To The Performance Of Commercial Banks In China

Commercial banks play an important role in the development of national economy.With the condition of the rapid development of social economy and the rapid development of science and technology,commercial banks are facing unprecedented challenges.In the form of online financial and other emerging economic impact,the development of traditional commercial banks encountered a bottleneck in the past few years.The interest rate liberalization is an inevitable choice with the development of financial industry.From the history of the global market,by interest rate liberalization,the interest rate can correctly reflect the supply and demand of the market,which will help improve the efficiency of resource allocation of funds and promote the optimal allocation of funds.Also,interest rate liberalization will help commercial banks to improve their competitive ability to deal with the new situation.At the same time,interest rate liberalization will also weaken the commercial banks and take a impact on their own business.Interest rate liberalization will promote the competition among commercial banks and improve the operational efficiency of commercial banks to serve the national economy more effectively.From the actual situation in the past,Chinese government controlled the interest rates for a long time.Commercial banks got monopoly advantage with government's policy.Although this provided great help for the rapid development of commercial banks once,but with the time going,commercial banks became difficult in management.China started interest rate liberalization in 1996.The role of market factors on interest rates continued to improve in a long time.Also,commercial banks was influenced because of the reform.In this context,this paper will focus on the influence to the performance of the commercial banks of interest rate liberalization and establish a model between interest rate liberalization and the performance of commercial banks to explore the overall relationship between interest rate liberalization and the performance of commercial banks,hoping provide some references.This paper is divided into five main parts.First of all,in the first and second part,five main ways which will imfluence the performance of commercial banks are summed up: the monopoly effect disappears,the interest spreads narrowed,interest rate risk,the allocation of resources and the commercial banks' adjustment and innovation ability.In the third part,this paper constructs the interest rate liberalization index by the analytic hierarchy process.In the fourth part,this paper selects fourteen listed bank data,set up the interest rate liberalization index by AHP,and constructs the performance evaluation system based on principal component analysis,obtained the performance score of commercial banks?In the fifth part,a model is constructed to analyze the relationship between interest rate liberalization and the performance of commercial banks.According to the empirical results,the interest rate liberalization and the increase of interest spreads will have a negative impact on the performance of commercial banks,while the actual economic growth rate and market interest rate's increase to help commercial banks to improve business performance.Those kind of influences comes from the interest rate fluctuation,the market competition,the adjustment of commercial banks,the innovation and so on.In addition,the technical progress,the social development also take an influence.Finally,this paper makes a summary of the conclusions of the study.Combined with China's national conditions,the current situation of the financial industry and the reform of interest rate liberalization,this paper gives four suggestions.The innovation of this paper showed:(1)on the basis of the previous research,the paper makes an improvement on the index system of interest rate liberalization.(2)this paper designs a set of index system to measure the performance of commercial banks.(3)combined with the new form of interest rate liberalization reform,this paper examines the impact of interest rate liberalization on the performance of commercial banks.(4)the paper summarizes the ways of the impact of interest rate liberalization to the performance of commercial banks,and makes a summary from five aspects.