A Study On Personal Loan Risk Management Of Domestic Commercial Bank

It's very important to develop personal loan business, especially in the current phase of national economic development. The functions of personal loan business are not limited to improve living standard and quality of citizens. Actually, it also has very important functions of promoting consumption, expanding internal demands, supporting sustainable and rapid development of national economy, advancing credit structures and quality of loan assets of commercial bank, etc. After 90s of 20^th century, accompanying drastic competition of global banks, famous overseas banks restructuring their business stratagem to focus eyes on consumption loans which leads to a low capital consumption. It's obvious that the fast development of retail banking business has been the basic trend of structure evolution of international banking business. In recent years, major domestic commercial banks has launched adjustment of loan structures and actively carried out the retail banking business development stratagem in order to avoid capital restriction and increase profit ability. But many facts show that large expansion of personal loans in overseas banks leads to high risks. For example, in this summer, the sub-prime mortgage loan crisis starting from America and affecting the world tells us all banks must think much of risk of personal loan business. Therefore the advanced study on risk management of personal loan is very meaningful for the bank.This article adopts the study ways of combination of theoretic analysis and practice illustration. First, the category of personal loan risks and relevant theories are introduced and two level (both macro and micro) reasons of risks are carefully analyzed. Second, referring to experiences of personal loan risk management from commercial banks in U.S.A., U.K., Japan, South Korea, Hong Kong, the article emphasizes a representative mode of risk management. Finally the article exposes the current status, problems and reasons of personal loan risk management in domestic commercial bank and raises solutions and suggestions for improvement of personal loan risk management.The article is divided into four chapters. The first is general situation of personal loan risk in commercial bank, in which the concept, category and relevant theories are included. The second introduces the overseas bank's experiences on personal loan risk management. In this chapter, the history, current situation, common characters and special characters of personal loans business in U.S.A., U.K., Japan, South Korea, Hong Kong are introduced in details. The third exposes and analyzes the current status, problems and reasons in personal loan risk management in domestic bank. The last chapter is the solutions and suggestions for strengthening domestic bank's personal loan risk management. On the basis of the former three chapter's analysis and conclusion, the chapter raises establishment of personal loan risk management systems for domestic commercial bank, including improving personal credit information systems, accelerating legislation of personal loan, advancing bank's management level, launch of personal loan guarantee and insurance.