Measurement And Calculation Of Uniform Credit Line Of Chinese Commercial Banks Under New Basel Accord

Credit granting is the most basic and traditional business of the commercial banks and how to measure and calculate the uniform credit line has topped agenda of Chinese commercial banks. Uniform credit granting has been well defined in the implementation guidelines on uniform credit granting by commercial banks(draft) issued by People's Bank of China in 1999, and each bank has setup their own regulation on uniform credit granting and the measurement and calculation of credit line.The framework of new Capital Accord released by Basel Committee in 2004 provided a new method to calculate the required regulatory capital based on the internal risk based method. It can be an important guideline for the calculation of credit line.This article has presented a new method to calculate the credit line which is in accordance with Basel Accord based on the calculation method of Industrial and Commercial Bank of China, and make some suggestion for how to improve the calculation method of uniform credit line in Chinese commercial banks.