Commercial Bank Inner Models For Credit Risk Measurement And The Application In China

Credit Risk is main risk for the financial organization, especially for the bank. Strengthening the management of the credit risk is always the financial industry and Its supervising organization work key point. At present, our commercial banks' higher non-performing loans(NPL) have become a big hidden danger for our economic healthy development.The institutional factor of economict ransition is an important reason of forming a NPL loans, but at the same time,the lower level of our banks'risk management, and especialy not finding a perfected credit measurement technology have accelerated the forming of NPL.Now our banks'measurement is still at primary stage of traditional credit rating. The western developed country banks have already formed very advanced inner models for credit risk measurement. These models take advantage of all information to analyse the credit states of terterprises. Using these models, the banks have improved risk managerial ability. With unlocking greatly of our financial transaction,the foreign banks will gradually gettherit for competing with the domestic bank on an equal basis, and present low risk management level of domestic bank will maket heir outo fun favorable competit ive position. With the globalization of financial markets, the development of new financial instruments and changes of credit risk, all these demand much beter methods for therisk measurement and management. Creditrisk management is the entire process that involves continuous identifying, measuring, controlling and managing of credit risk.The goal of credit risk management is to maximize a risk-adjusted rate of return by maintainingc redit risk exposure within acceptable parameterThe purpose of the research in my dissertation is to find out suitable credit risk measurement model for our country at present, and improve the credit risk Management level of our banks through there ference of this model.