The Research Of Our Country Commercial Bank Credit Risk Management Problems

Credit risk management has been a top priority of the commercial bank riskmanagement. Especially, Since "The New Basel Capital Accord" has made theframeworks of credit risk management theory, commercial banks in every countriespay great attention to the opportunity of raising the overall bank credit riskmanagement to adapt to external regulatory requirements regarding“the New BaselCapital Accord”. Additional to the financial crisis that caused the global economyserious losses, international financial environment become more volatile, the potentialcredit risk of commercial banks increased significantly, an important issue that how tomanage credit risk more effectively and raise the level of bank earnings has beenimportant for commercial banks to explore.Before the shareholding reform, China’s commercial banks have a huge amountof non-performing assets and serious credit risk exposure. According to a reportreleased by the China Banking Regulatory Commission show that, by the end of2003,2.4406trillion Yuan of non-performing loans of China’s major banking institutions,non-performing loan ratio as high as17.8%. Despite the heavy non-performing assetshave been stripped, but China’s commercial banks brought a painful lesson. WithChina’s accession to the WTO, global economic integration deepens, the Chinesecommercial banks will be more involved in the ranks of international competition,whether it is a large commercial banks, or the gradual rise of joint-stock banks andlocal city commercial banks to adapt to external supervision and enhance their corecompetitiveness are actively exploring for our development and credit riskmanagement system.The New Basel Capital Accord proposed to the IRB as a commercial bank creditrisk management tools to measure credit risk, which includes PD、LGD and EAD. Itis a major innovation in risk management of commercial banks. In recent years, moreand more commercial banks in China promote the construction of the internal ratingsystem, and credit risk management was significantly improved, but from the NewBasel Capital Accord requirements and international advanced level of the bankingsector still lags behind. This paper which starts from the characteristics of credit risk of commercial banks deeply discusses the application in credit approval, loan pricing,quota management, preparing gold provision and allocation of economic capital.From the case in G bank and M bank, we find that IRB has the advantage of creditrisk management in the field of commercial banks in China. Finally, the technologyexists for credit risk management of commercial banks in China is relativelybackward, the lack of data, management information systems are imperfect,professional quality, not high, asked the commercial banks in China application IRBfor credit risk management should be enhanced constructive comments, such as: toestablish and improve the information database, to develop technical modelsappropriate to their conditions, and to promote the reorganization of credit policiesand procedures, and to make full use of internal rating results, and to establish thehighly qualified professional team.