The Research On Internal Rating Of Commercial Banks

Credit risk is the major risk witch Chinese commercial banks are confronted with, the credit rating is not only the basis of measuring credit risk, but also the difficulties in credit risk management. The proposition of Basel Capital Accord pointed out the aspects of risk measurement for commercial bank, especially the new Capital Accord put forward in 2004 has a far-reaching impact, the core of witch is IRB, and it has become the generally accepted risk rating and risk measurement methods of the word's banking industry, what's more IRB represents the general direction of the development of risk management technology.To providing reference and inspiration for construction of our internal rating system, this paper is based on the interpretation of the New Basel Capital Accord, expounds the framework of the IRB, and explains the advanced experience and successful cases of IRB implementing in foreign countries, finally analyses the current situation and existing problems of our internal ratings, and propose countermeasures. In empirical part, I discuss and instruct a Chinese commercial bank's internal rating system by chart analysis, and take the rating process of a specific case for example to understand its mode of operation and availability, in order to reflects the problems of internal rating in our commercial banks as Bank A.This paper is divided into six chapters, the first one summarizes the paper's background, significance and the investigating situation of domestic and foreign countries, then demonstrates the study feasibility, finally proposes the paper's technical route. The second chapter elaborates on the New Basel Capital Accord and interprets the theoretical framework of IRB briefly, which is the core of New Basel Capital Accord, it provides a theoretical basis for this paper's research. The third chapter describes foreign advanced method of internal rating and studies its successful internal rating system, in order to play a reference role for construction of our internal rating system. Chinese commercial bank's current situation is discussed in the chapter four, what's more includes the major situation of domestic bank's internal rating system building. In the fifth chapter, I take a bank of our country as the research object, analyzes and presents its status of rating system, and through a specific case to explain its operation process. Aim to the problem of our internal system, the last chapter proposes countermeasures and makes a conclusion.