| Our government promised Chinese Banking Business will be completely opened tointernational market and 2006 is the deadline when every protective policy is cancelled.Foreign banks and Chinese bands will be in equal position, which is the symbol to showChinese banking blends into the world market and takes a share in global competition. Themarked difference between the old Basel Capital Accord and the new one is to introduce theasset risk into the requirement of the minimum capital, which increases the risk sensitivenessof bank asset greatly, especially the Internal Rating Based Approach (IRB), which can also beregarded as a big challenge for the banking all over the world. China, as an emerging-marketcountry, whose banking reformation began very late, hangs behind in the risk management ofbank asset. Nowadays Chinese banking has to face two problems. The first one: how toimprove the management of credit risk and how to connect with the normal standard ofinternational banking earlier? The second one: how to establish an advanced, scientific andeffective International Rating System (IRS)?As to establishing IRS for Chinese commercial banks, both of the ways, staying in oldsystem or copying from foreign countries, come to a dead end. Reference and Innovationshould be adopted. Chinese banking uses foreign advanced experience and system mode inIRS for reference and analyzes domestic environment, experience and development. Byanalyzing the economic environment of credit-risk-rating, the paper illustrates the basicthought, the main frame and the minimum standard of IRS;With the help of IRS proposed byBasel Committee and reference to foreign advanced rating system, it puts forward the InternalRating System frame for commercial banks. The last part of the paper makes suggestions tooperate IRS in Chinese Commercial Banks by researching into the status quo and difficultiesof IRS, and it also emphasizes on the application of IRS in Chinese Commercial Banks. |
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