An examination of interest rate risk of mercantile banks in China

The paper uses econometric analysis to estimate the average asset and liability maturities for Chinese commercial banks. Regression models are then tested to determine if interest rate fluctuations have a significant impact on banks' net interest income. The researchers conclude that Chinese commercial banks are currently exposed to considerable interest rate risk, the exposure of medium-sized commercial banks being much larger than the exposure of larger banks, and that interest rate risk mitigation will become a strategic focus of private commercial banks in China's financial markets in coming years.