Research On Chinese Bank Loan-loss Provisioning System

Since the first modern commercial bank - England Bank established in 1694, the commercial bank have developed over three hundred years so far. Bank credit is, originally, a way of indirect financing. By using its own credit, banks absorb the capital from depositors, and create its asset by releasing the loans. Naturally the income and the loss are greatly unsymmetrical, because the bank only has the interest premium as the income, but once the debtor defaulted, the loss is the whole loan, which is always times of the interest. This character makes the risk management become the central task of banking operationsWith the development of the commercial bank, numerous of risk management tools have been invented, more and more advanced statistical models as well, all of these greatly help creating more accurate risk exposure. On the other side, after the some fatal banking crisis, an international regulatory system, represented by Basel Accord, has been...