Research On The Impact Of Interest Rate Marketization On The Bankruptcy Risk Of China's Commercial Banks

Financial liberalization is an important trend in the current economic development.One of the core contents is the interest rate marketization.At present,an important task of China is to deepen the reform of the financial system and realize the optimal role of the market in resource allocation,thus promoting the sustained and steady growth of China's economy.China's interest rate marketization reform originated from the regulation of the People's Bank of China to liberalize the inter-bank lending rate in 1996.By 2015,China will lift the upper limit of the RMB deposit interest rate,and the 20-year interest rate liberalization reform has basically ended.The marketization of interest rates has greatly promoted the effective competition of China's commercial banks,and the allocation of funds has been optimized,but this has also caused problems such as the operational risks and credit crisis of commercial banks in China.The most obvious one is the contraction of the loan-to-deposit spread of commercial banks in China,and the decline in bank operating profits.As a result,the internal competition of commercial banks has intensified,and the bankruptcy risks faced by commercial banks in China are also increasing.This paper first introduces the interest rate marketization from the relevant theory and development history of interest rate marketization development,and provides lessons for China's interest rate marketization reform by comparing the interest rate marketization reform process in developed countries such as Europe,America and Japan.Then,the paper further expounds the concept of bankruptcy risk in China and analyzes and discusses the main influencing factors of bankruptcy risk.Then through the analysis and combing of the status quo of China's commercial banks,the necessity of China's interest rate marketization reform is obtained.At the same time,this paper expounds the main cause of the risk of commercial banks in China from the aspects of information asymmetry and moral hazard by proposing the mechanism of interest rate marketization on the bankruptcy risk of China's commercial banks,and analyzes the mechanism of interest rate marketization for China's business.The transmission path of bank bankruptcy risk,thus achieving relevant breakthroughs and reasonable explanations in theory.Then it further analyzes the effect of interest rate liberalization on the bankruptcy risk of commercial banks in China.In terms of variable selection,this paper first analyzes that the net interest margin of commercial banks' deposits and loans as the explanatory variable of this paper indicates the interest rate marketization level,and at the same time constructs the interest rate marketization index to comprehensively reflect the change range of interest rate marketization,which can effectively reflect the interest rate market.The direct impact of commercialization on commercial banks.On the explanatory variables,this paper selects the Z value that can comprehensively measure the bankruptcy risk of commercial banks as a proxy variable.At the same time,in order to improve the robustness of the empirical results of this paper,the provision coverage ratio of commercial banks is selected as the test of robustness.Relevant verification was carried out.In the empirical aspect,this paper constructs a panel data regression model based on two different proxy variables: net spread and interest rate marketization.To eliminate the time inertia,the lag period of the interpreted variable is added to the model.At the same time,the model also comprehensively selected the relevant trait variables and macroeconomic variables of commercial banks.Based on the annual data of 16 commercial banks in China from 2006 to 2016,the balanced panel data model was constructed and fixed-effect regression analysis was carried out.The empirical results show that in the process of interest rate marketization,the bankruptcy risk of China's commercial banks is indeed increasing,and the traits of commercial banks themselves(capital adequacy ratio,loan-to-deposit ratio,cost-to-income ratio,return on total assets,net interest income).The ratio)is also an important factor affecting the risk of bankruptcy.Finally,the paper puts forward corresponding policy recommendations from the aspects of bank management and macro-level supervision.