Research On Commercial Bank Credit Risk Control In China

With the deepening of China’s joint-stock commercial bank reform, the level ofcommercial bank credit risk control continues to improve, asset quality improves significantly,the NPL ratio decreases, profitability continues to improve. But comparing with foreigncommercial banks, credit risk control ability is low, and commercial bank can not effectivelyprevent and control risks.Firstly, Basing on the relevant theory and literature research on credit risk control ofcommercial bank to analyze the general causes and special causes of the credit risk ofcommercial banks in china. General causes of the analysis：using information asymmetry andprincipal-agent model to analyze the bank’ moral hazard behavior and using bank lendingrates of adverse selection to analyze adverse selection and moral hazard model of borrowers.Special cause analysis from constraints of commercial bank credit risk control finds:unreasonable corporate governance, internal control systems, credit risk management processbackward, information control systems can not keep up with the needs of development,ownership is not clear, market financing system backward, external oversight are importantcauses of China’s commercial bank credit risk control issues. Secondly, by means of China’scommercial bank credit risk control system for in-depth analysis finding it mainly throughsounding corporate governance structure, improving the internal control system, optimizingbusiness processes credit, loans to invest in a combination of methods to control credit risk.Through in-depth study of its practices found in commercial bank credit risk control, there arestill many shortcomings, such as insufficient credit risk control system is not perfect, creditrisk is too concentrated. Finally, by learning from Citibank credit risk control experience andcombining with our reality puting forward to improve the corporate governance structure,strengthen internal control, optimize credit risk control information systems, cultivateexcellent staff culture, properly deal with bad credit assets, innovative financing system, andstrengthen the external regulatory’ solutions.