Case Research On Credit Risk Management In ABC Branch Of Bank Of China

The credit business is the core business of the Commercial Banks, and credit risk is the key risk that Chinese commercial banks confront. Because of the importance of the credit business, the credit risk management has been the main object and core content of commercial bank control. The enacting of Enterprise Risk Management Framework and the new Basel Capital Accord symbolize the new orientation in the bank risk management—Enterprise Risk Management,that is to say control all kinds of risks which banks confront as a whole in the strategic perspective. In China, Finance Department, the CSRC, the CNAO, the CBRC and the CIRC united release the Basic Standards for Enterprise Internal Control in May 2008, and then release the Enterprise Internal Control Supporting Guidelines in April 2010. These two Standards establish the Chinese system of internal control together. The Basic Standards for Enterprise Internal Control is a system of internal control which is geared to international conventions, and takes the ideas and concepts on the COSO Enterprise Risk Management Framework in the foundation of China's actual conditions. The construction and development of China's. internal control is deeply influenced by its announcement. This paper is based on the standpoint that internal control and risk management is equal, and author believes that the Basic Standards of Enterprise Internal Control is the landmark regulation which means the traditional internal control has developed to risk management, and the standards brings new concepts and regulations to the improvement of credit risk management in China's commercial banks.As the credit risk management is the core part of commercial banks risk control, the Basic Standards of Enterprise Internal Control provides a clear guide to improve the system of credit risk management for China's commercial banks. Through the method of case study, this paper analyses the vertical credit risk management system in ABC Branch of Bank of China in the base of the five key elements of the Basic Standards of Enterprise Internal Control. The main contents of this paper are as follows:The first part is theoretical basis of this paper. At first, the paper introduces three main views in the relationship between internal control and risk management, then the paper states clearly that the author agrees with the standpoint that the internal control is equal with risk management, and demonstrates this view from three ways. At last, the paper reviews the development of the internal control in China, which is from traditional internal control to risk management. The second part is mainly to interpret the Basic Standards of Enterprise Internal Control, then analyzes the reasons of implementing the standards in commercial banks'credit risk management and the innovations which the standards give to the bank's credit risk management. The third part is to analyze the credit risk management of ABC Branch.First, the author introduce the basic situation of analyze the credit risk management of ABC Branch, then analyze clearly in the sight of the five elements of the Basic Standards of Enterprise Internal Control. The fourth parts of the paper is to state the achievement, disadvantages and advices of the credit risk management of ABC Branch based on the analysis above.The last part is conclusion of this paper and its deficiency.