A Studies On Commercial Bank Risk Management Of Credit In China

The finance is the economics lifeline of a country and a core of the modern economy. Banking bad credit assets are important reasons that bring out social financial risks. Asian financial crisis, Russia's economic crisis, Brazilian financial turmoil, Japan and Thailand and Korea financial institutions' bankrupt and the central U.S.A. financialInstitutions'risk in 70-90's of the 20th century, can declare publicly from different angle that banking non-performing Loan assets destroy social economy and is the most heavy hidden danger of steady finance.The banking industry gradually integrated the financial globalization advancement with China entered the WTO, especially China's opening its banking market enrollment completely in the end of 2006, the foreign commercial banks will officially enjoy the national treatment in China. As they have the superiority of technique in the risk management,Local bank will experience fiercer competition. Therefore, it is obviously urgent and important for China's banking industry to make a research of the credit risk management and improve the technique level in the risk management.This text has carried on the deep-going discussion on the risk of the state-run commercial bank credit and made every effort to excavate out the rational measures that can help commercial banks of our country with their reform. This thesis can be divided into five parts. At the beginning, it puts forward the concepts of risks, credit risks, risks of credit assets, analyzes the problems and pressure that our country's commercial banks are faced with from four aspects that objectively exist, further explains that it is actually very significant to improve the management of credit assets. The second part illustrates the foundation that the management theories of credit risks could be founded. According to the characteristics and regularities of credit capital's movement, it drafts out the methods of managing risks in terms of banks' rights of controlling credit assets. This paper believes that, although the commercial banks are confronted with various risks such as credits risks, financial market risks, operational risks, etc, some of them can be resolved through the application of financial instruments, while some others can be prevented by certain rationalized and optimized arrangements in the risk management system. Inspired by the underlying spirit in the relevant documents of the Basle Committee and by the risk management experience of competitive transnational banks, this paper analyzes the credit risk management of China's commercial banks in such aspects as the improvement of technological application in hedging against credit risks and the strengthening of internal control as well as external surveillance. At present, China's commercial banks are confronted with a wide range of dangerously high credit risks while lacking efficient instruments of prevention. This is an obstacle that would hinder the further development of the banks themselves as well as that of the country's economy. Therefore, and in particular, it has become an urgent task for China's commercial banks to counterbalance the risks engendered by the tremendous amount of non-performing loans. The paper submits a range of specific proposals for the improvement of the banks' credit risk management, which should prove to be applicable to both the four state-owned commercial banks and the ten joint-stock ones in identifying, preventing, and resolving credit risks.