Research On Credit Risk Prevention And Control Of Commercial Banks In China

In today’s society, the market economy continues to develop, the size of the credit risk of commercial banks is directly related to the stability of the entire financial system. Therefore, the accurate and effective prevention and control of credit r isk in commercial banks is the key to the successful operation of our country, and is also an important prerequisite for the sustained and rapid development of socialist economy.This paper summarizes the related theories of commercial bank credit risk and credit risk prevention and control in C hina. Through the comparisons of models, this paper chooses KMV model to evaluate the credit risk of commercial banks in C hina, takes the financial data of 16 listed commercial banks in China as samples, classifies commercial banks into state-owned commercial banks, joint-stock commercial banks and city commercial banks, calculates the default distance and default probability. According to the comparisons, the default probabilities of joint-stock commercial banks and city commercial banks are generally higher than that of state-owned commercial banks. Then, from the aspects of external environment construction and internal prevention and control systems, analyze that the credit risk control and prevention in current C hina’s commercial banks have the problems of lagging database development, lagging credit rating method, limited credit risk control and prevention tools and the lack of supervision in borrowing funds. Based on credit risk control and prevention experience of commercial banks in developed countries, propose effective and correct countermeasures and suggestions to enhance the credit risk prevention and control level of commercial banks in China.