The Research On The Factors Of The Credit Risk In China’s Commercial Banks

The main research of this paper is the factors influencing credit risks of thecommercial banks. We know that the credit risks of the commercial banks are themost important factors, which will directly impact the state of operation and thefuture development. Lower credit risks are significant to the stable of the financesystem and the sustainable economic development. This article uses qualitativeanalysis and empirical analysis to show the influences of the macroscopic andmicrocosmic factors. Based on the analysis, this paper puts forward the suggestionson commercial banks controlling its risks, also the financial regulators.Here is the introduction of the thesis structure: The first part talks about theeconomic situation and the effect of the credit risk. As a result, it is meaningful tostudy how the specific factors affect the operation of the commercial banks. Themainly points of scholars concentrates more on macroscopic factors thanmicrocosmic factors. The second chapter introduces the concept of the credit risk,including the narrow sense, and then trying to find out the characters and the reasonthat what lead to its happening on earth. In the third chapter, we selectively analysisthe affective factors. While we choose these factors as variables and treat the NPLratio as explanatory variables. By using the panel data analysis, we find out how thevariables influences the NPL ratio. At last, based on the conclusions, we put forwardtargeted suggestion on commercial banks and the regulatory authorities.The conclusions of this article are as follows: On one hand, macroscopic factorshave more influences on the commercial banks’ credit risks than microcosmic factors:The higher growth rate of the GDP will significantly reduce the credit risks faced by the commercial banks, otherwise, while the higher inflation rate and the highermonetary growth rate will aggravate the credit risks of the commercial banks; On theother hand, the higher capital adequacy ratio will effectively reduce the credit risks;The operating efficiency of the commercial banks is negatively related to credit risks;The scale of operation will increase the credit risks of the commercial banks; Thehigher loan-to-deposit ratio will decrease the credit risks; Higher loan growth ratein the short time will apparently reduce the non-performing loan ratio, while in thelong time, the influence cannot be sure.