Research On The Assessment Of Credit Risk Internal Controls For China's Commercial Bank

At present, the reform of China's commercial banks have Entered a Crucial stage to improve risk control capacity. To strengthen internal controls an important means of banking risk control. Credit is the main business of commercial banks, and credit risk control mechanisms are very important.The aim of assessment of credit risk internal control to supply evdence for internal control construction,through effective assessment of credit risk internal control. So, assessment of credit risk internal control is the key section of internal control system. This paper take effectiveness of internal control mechanisms as it's aim. Based on analysing the defect of the present credit risk internal control assessment system. Introducting the idea of economic capital and the method of RAROC to credit risk internal control assessment system. Re-designing the index of credit risk internal control assessment to make the assessment Systematic, logic and standardized. Using the realy date of commercial banks to empirical analysis the proposed credit risk internal control assessment system.The proposed assessment method include process assessment and results assessment.The new assessment method Show more Scientific and effective.To improve the level of commercial bank's credit risk internal control, this paper propose suggestion as follows:to reconstruct credit risk control mechanism using flat vertical management; to establish or perfect the vertical independent credit assessment and approval system of bank, effective credit audit and inspection system and a complete credit management information system. Perfecting the commercial bank corporate governance, strengthen the binding mechanism between the management of commercial banks and shareholders, to form the organizational structure of credit risk; sound credit risk management constraint mechanism, linked the credit risk of internal control to staff performance appraisal,and job promotion, give full play to the management and implementation of sector initiatives, through establishing incentive and restraint mechanisms to achieve balance of power; organically together the economic capital management and internal control credit risk, use RAROC approach to credit risk evaluation of the results of testing of internal control, and from the perspective of internal control factors RAROC indicators to make the credit risk internal control and performance management more effective.