Research On The Effect Of Interest Rate Marketization On The Profit Model Of BOC Bank

Since 1993,China launched the process of interest rate marketization from foreign currency to local currency,from long to short term,from loan to deposit,and from large amount of money to small amount of money.This process has a great impact on China's financial industry,especially the banking industry.The liberalization of interest rate has expanded the autonomy of commercial banks' management,promoted the business innovation of commercial banks,and promoted the more scientific management of commercial banks.But at the same time,it also brought huge challenges to commercial banks and had some adverse effects.For example,interest rate risks have expanded,and the competition between banks is more intense.In our country,the bank itself has the problems of homogeneity and simplification of business structure and strong substitution between each other.In particular,interest rate liberalization brings banks' independent pricing power,so that many small and medium-sized banks can seize the market of large commercial banks by raising interest rates of deposits and finance,and this situation will become more intense.With the interest rate marketization and the profit model of commercial banks as the core,taking the typical large commercial bank of BOC as an example and combining qualitative analysis and quantitative analysis,this paper is to prove that the interest rate market has an effect on the profit model of BOC and to carry out a more in-depth study on this issue.In qualitative analysis,we make the analysis of the mechanism impact on the profit model of commercial banks in the interest rate market.In the related theory and literature review,analysis of the impact of interest rate marketization on the profit model of BOC stresses the need to change the descriptive.With the influence of interest rate marketization,the commercial bank shall make a business model to expand non-interest income.In empirical analysis,this paper uses stepwise regression method analysis,the capital adequacy ratio,non-performing loan ratio,total assets,operating income,deposit ratio and other related indicators from 2003 to 2016,to find the main factors which cause the impact of interest rate marketization on the profit model of commercial banks.Through qualitative analysis and empirical analysis,we can draw conclusions as follow: Firstly,the interest rate marketization has changed the profit mode of large commercial banks and the competition pressure inside the industry has also been increasing.Secondly,large commercial banks should change the traditional extensive profit model and reduce dependence on the interest spread.Lastly,paying close attention to the transformation of traditional profit model,interest income and non-interest income and profit model,large commercial banks can be in an invincible position under the process of interest rate marketization as well as the fierce market competition.