Purpose: Most prior studies on interest rate liberalization focused on banking system reforms and technological reforms, as well as liberalization’s impact on the profitability of commercial banks. Rarely considered were the effects of monetary policy or management’s leadership ability. This paper aims to investigate the influence of these two missing aspects and to explore whether or not such liberalization has had any influence on commercial banks’ risk resistance capacity and, if so, to identify the nature of that influence. Methodology: This article considers 18 commercial banks in China, operating from 2003 to 2018. Analyses include descriptive statistics, the Sobel test, the ADF stationarity test, and the VAR model co-integration test. Main Findings: Our results show that China’s interest rate marketization reform has a net positive effect on reducing bank risk, despite the new risks created by reform. Commercial bank anti-risk capabilities were also found to be improved both by China's monetary policy transmission for interest rate liberalization and by the strategic leadership capabilities of individual bank managers. Results: Based on these research results, this article encourages the Chinese government to strengthen appropriate laws and regulations to reduce the bankruptcy risk of commercial banks during interest rate liberalization. Commercial banks should build competent risk management teams with the ability to anticipate risks to allow their banks to better resist the disadvantages of interest rate liberalization reforms. Application: Based on these research results, this article can provide insights for the Chinese government, showing that appropriate laws and regulations should be strengthened to reduce the risk of bankruptcy that commercial banks may face as a consequence of interest rate liberalization. Originality/Value: This paper contributes to the theory of interest rate liberalization and anti-risk capability of commercial banks, by conceptualizing new constructs from strategic leadership and monetary policy transmission theory. It finds that market-oriented rate reform has increased interest rate risk and complicated the term structure. Commercial banks should, therefore, improve their operational management capabilities and optimize their internal governance decision-making mechanisms.