Research On Default Risk Management Of Private Housing Credit Based On The Information Asymmetry Theory

From the middle of 1980s, private housing credit market has been gradually growing in China, but it is far from perfection. Institutions and management have not been developed with the market scale expansion, and there occur a series of problems. Risks of private housing credit market, which becomes an important part of credit management of commercial banks, are accumulating and emerging.This thesis uses information asymmetry theory to explain what accounts for the private housing credit risks, and goes deep to the risk sources of housing credit, quantifies the impact factors of private housing credit and takes some emprirical research on the housing credit data of a certain commercial bank of Changsha in case. The result shows that impact factors of house price include fluctuation ratio, loan to house value ratio, riskless interest rate and term of loan on default rate. The larger the house price fluctuation ratio and loan to house value ratio are, the higher of the default rate; the higher of the riskless interest rate is, the lower of the default rate; and the default rate trends to become higher at first and then get lower as the term of loan getting longer. To decrease the degree of information asymmetry so as to decrease private housing credit risks, commercial banks should pay close attention to the volatility of household price and control the rhythm of loan in order to take the low house price fluctuation ratio for granted. And then a relative higher riskless interest rate is needed to justify the demand-supply relationship of housing market. They also should take a proper loaning period to effectively avoid happening of private housing credit risks.Above all, commercial banks should see internal control as the core of private housing credit risk management, and bring inspections before, during and after the contract together to enhance the dynamic supervision power and management level. Second, commercial banks should make the best use of information network of the People's Bank of China, and reinforce information sharing among commercial banks through information database. Third, commercial banks should absorb international methods of risk management, promote mortgage backed insurance, boosting the sustainable development of private housing credit of China's commercial banks.