Chapter 1 IntroductionChapter 1 Introduction 1.1 Definition of the Interest Rates marketization1.1 Definition of the Interest Rates marketization What is called interest rate marketization is defined as money marWhat is called interest rate marketization is defined as money mar

ket funds both supply and demand determine the level of interest rket funds both supply and demand determine the level of interest rates independent of the interest rate decision of the evolution of mates independent of the interest rate decision of the evolution of mechanisms. Particularly speaking, market-oriented interest rate refechanisms. Particularly speaking, market-oriented interest rate refers that the cerntral bank controls the benchmark interest rate basers that the cerntral bank controls the benchmark interest rate based on monetary policy, every commercial bank adjusts the interest ed on monetary policy, every commercial bank adjusts the interest rate of deposit and loan on their own, finally has formed mechanisrate of deposit and loan on their own, finally has formed mechanism of running interest rate which embodies relationship between fum of running interest rate which embodies relationship between funds supply and demand and intention of central bank's monetary nds supply and demand and intention of central bank's monetary policy multiply and sufficiently according to the benchmark interest policy multiply and sufficiently according to the benchmark interest rate by the central bank. Interest rate marketization stresses on thrate by the central bank. Interest rate marketization stresses on that interest rate reflects relationship between funds supply and deat interest rate reflects relationship between funds supply and demand really, gives full scope for its economic lever function flexiblmand really, gives full scope for its economic lever function flexibly and effectively.y and effectively.

Chapter2. The problems of Interest rates Marketability Chapter2. The problems of Interest rates Marketability in National Commercial Bank.in National Commercial Bank.

2.1 The structure of the asset and the debt are 2.1 The structure of the asset and the debt are single.single.

The National Commercial Bank 's property struThe National Commercial Bank 's property structure is unitary, with the exception of the requircture is unitary, with the exception of the required reserves , the most are loan assets. In total ed reserves , the most are loan assets. In total liabilities, the sources of funding 95 percent relliabilities, the sources of funding 95 percent rely on the absorption of deposits. Greater sensitiy on the absorption of deposits. Greater sensitivity to interest rates, with extremely unreasonavity to interest rates, with extremely unreasonable, the bank net profit difference undulation is ble, the bank net profit difference undulation is bigger.bigger.

Chapter3. The steps of the interest rate Chapter3. The steps of the interest rate marketization in Chinamarketization in China

Although the marketization of interest ratAlthough the marketization of interest rates rates on China's financial system need es rates on China's financial system need to be further reform and perfect, but it alsto be further reform and perfect, but it also should be based on the development of o should be based on the development of the financial markets maturity of a plannethe financial markets maturity of a planned and step-by-step manner.d and step-by-step manner.

Implement the interest rate marImplement the interest rate marketization step-by-step .ketization step-by-step . On the interest rate management system, it caOn the interest rate management system, it ca

n be divide into three steps: the first step is adjn be divide into three steps: the first step is adjust the bank's interest rates and the interest ratust the bank's interest rates and the interest rate structure, re-establishing the central bank's be structure, re-establishing the central bank's benchmark lending rate for the interest rate systenchmark lending rate for the interest rate system, increase the Central Bank lending rates, aem, increase the Central Bank lending rates, and let above the commercial bank’s absorb the nd let above the commercial bank’s absorb the average cost of deposits. This step has been raverage cost of deposits. This step has been reflected, but it still need to be perfect improve. eflected, but it still need to be perfect improve.

Increase development ability of the intermediate serviIncrease development ability of the intermediate service product and adjust profit structure.ce product and adjust profit structure.

After the interest rate marketability, bank deposAfter the interest rate marketability, bank deposits, loan spreads narrowed, reducing the profit lits, loan spreads narrowed, reducing the profit level, which requires the state-owned commercievel, which requires the state-owned commercial banks must vigorously develop intermediate al banks must vigorously develop intermediate business. Banks can actively expand the collecbusiness. Banks can actively expand the collection, and the businesses pay at the same time, tion, and the businesses pay at the same time, make full use of commercial banking market elimake full use of commercial banking market eligibility, positive for other financial institutions to gibility, positive for other financial institutions to provide agents to issue bonds, Bank Stock Traprovide agents to issue bonds, Bank Stock Transferring, insurance, fund trustees….nsferring, insurance, fund trustees….

Chapter 4 .The countermeasure of the StChapter 4 .The countermeasure of the State Commercial Bank.ate Commercial Bank.

Establish a scientific and rational pricing system of the financial prEstablish a scientific and rational pricing system of the financial products.oducts.

In the interest rate marketization situation, whether can the commIn the interest rate marketization situation, whether can the commercial bank draw up a scientific and rational pricing system, has thercial bank draw up a scientific and rational pricing system, has the nimble effective quoted price ability to achieve risk-benefit balane nimble effective quoted price ability to achieve risk-benefit balance is the key to sustainable development. In this process, must estce is the key to sustainable development. In this process, must establish the effective comprehensive income to survey the system, tablish the effective comprehensive income to survey the system, the synthesis considered customer the comprehensive income whihe synthesis considered customer the comprehensive income which brings to the commercial bank, the customer credit risk size, thch brings to the commercial bank, the customer credit risk size, the loan deadline length is the interest rate risk size, as well as come loan deadline length is the interest rate risk size, as well as commercial bank' s collection fund cost and the operation problem.mercial bank' s collection fund cost and the operation problem.

Conclusion Conclusion The marketization of interest rates is an important element in ChinThe marketization of interest rates is an important element in Chin

a's financial system reform , we need to face the necessity and rea's financial system reform , we need to face the necessity and reality in China's reform of marketization of interest rates and speed ality in China's reform of marketization of interest rates and speed up the process. From the analysis of China's marketization of inteup the process. From the analysis of China's marketization of interest rate, I conclude that the marketization of interest rates is a sysrest rate, I conclude that the marketization of interest rates is a systematic project , we must adhere to proceed in an orderly way antematic project , we must adhere to proceed in an orderly way and follow certain laws. At the same time, the marketization of intered follow certain laws. At the same time, the marketization of interest rate also brings the opportunity and challenge to our commerciast rate also brings the opportunity and challenge to our commercial banks, and we have to seize the opportunity, meet the challengel banks, and we have to seize the opportunity, meet the challenges and accelerate the market-oriented interest rate, actively promots and accelerate the market-oriented interest rate, actively promote our national commercial banks, carry out shareholding system re our national commercial banks, carry out shareholding system reform, establish a modern commercial bank management model , eform, establish a modern commercial bank management model , and to be the pioneers in the competition society.and to be the pioneers in the competition society.