The Study On Credit Risk Analysis And Management In Commercial Bank

Credit risk is one of the most ancient risks in financial market. If we define credit as a prediction of getting some money, then credit risk is the probability that the prediction won't turn into reality. The history of credit activity can be traced back to 1800 B.C. And with the credit activity coming into being, credit risk is always closely associated with it.Nowadays, with the rapid development of technology and economy, great changes have taken place in our human society. Especially in the past twenty years, the development of economy of the world has entered into a new phase. The finance transform and finance innovation also take on a speed-up situation.However, great risks come on the heels of the transform and innovation. As one of the most important risks in financial institution, credit risk is the crucial factor in managing the finance institute. Commercial bank is the principal part of present fiance organization and the most common risk it faces is credit risk. Now, more and more people put their attention to credit risk and the researches in credit risk have achieved great progresses in theory and in practice. But as one risk that is so difficult to make quantitative analysis, the researches in it is in the elementary state. The theory and model in analyzing quantitatively the credit risk have not formed a perfect system. Especially in our country, the management of credit risk in many commercial banks has the character of traditional form which cannot entirely keep up with the pace of our time. As a result, researches in credit analysis and management have become the most important tusks in current time.There are four sectors in this article. Firstly, we introduce the definition of the credit to you and take you to the character and development institution of modern credit. Secondly, we define the credit risk in the different way in comparison with the traditional definition. Thirdly, we analyze the management of credit risk from the following three parts: traditional management mode, Creditmetrics model and KMV model which can be the way to make quantitative analysis for credit risk, credit derivatives and which is the most important part. Finally, we put forward some suggestions in how to control and manage the credit risk effectively in the commercial bank in our country.