Research On The Institutional Causes And Controls Of Credit Risk In State-owned Commercial Banks

Market economy is a highly monetized and creditized resource-distributing mode, in which all kinds of risks in economy running will in various ways, eventually, center on and take the form of credit risk, the most fundamental type of risk in a financial system. Under the condition of market economy, the degree of credit risk fundamentally determines whether a financial system is stable and whether it can develop healthily and successively. Therefore, the management of risks especially credit risks in Chinese state-owned commercial banks must be strengthened, effective management of credit risks having to be based on a deep understanding of the systematic causes of credit risks.This thesis was to focus on the causes and controls of credit risks in Chinese state-owned commercial banks. Firstly, on the basis of defining the concept of credit risk, I clarified all kinds of forms of credit risks . And then pointed out the characteristics of the credit risks: subject, controllable, spreading, hiding and accelerating. Then I put emphasis on the research into the institutional causes, macro and micro, contributing to the credit risks in Chinese state-owned commercial banks. The macro causes are: the property right, macro economic policy, legal system and credit environment. The micro causes are made up by two parts, the first part is the problems exist in credit management and inner controlling mechanism of the commercial banks, the second part is the problem exist in the behavior of the enterprises. The second important part is about the institutional controls of the credit risks in state-owned commercial banks. Firstly, we analyze the institutions which should have being supervising and controlling credit risks in state-owned commercial banks. We have to point out the institution is ineffective at the controlling at the same time. The qualities of loans are falling down while the amount of loans are increasing. The credit risks are accumulating step by step. At the end of this article several methods are provided in credit risk controlling on state-owned commercial bank. To control the credit risks form the bottom, we should complete the ownership innovation on state-ownership. The unique state-ownership should be broken. The financial stock-dominating group should be the forms of our banks. State-owned bank could go on the stock market after innovation. Secondly, commercial banks should perfect the managing organization, and persist on the innovation of ownership, and create the sprit of enterprise, and develop the culture of inner risks controlling, and change the old-fashioned viewpoints and methods, and strengthen the judging mechanism, and fulfill the inner controlling activity etc. The third is establishing the honesty principal protecting law system and extensive credit file system to improve our credit environment. Innovating the administration of justice is to safeguard the judicial power with fair.