Research On Medium And Long Term Loans Portfolio Under Industry Concentration Optimization Of Commercial Bank In China

The level of loan portfolio management in commercial bank not only determines itsprofitability but also influences the stability and development of the financial environment.So the research on loan portfolio management optimization is crucial. This paper focuses onthe concentration risk.At the beginning, this paper introduces the connotation of the concentration risk, the causes,theoretical roots, risk effect, risk measure and the present situation of the loan concentrationin our country then some policy advice on concentration risk is given. In this paper, for thetarget of optimization the industry concentration of the medium and long term loans, underthe constrains of that the unit risky return is not less than the given one, and of the relatedlaws and regulations, medium and long term loans portfolio optimization model isestablished. The quantitative control of the concentration risk of loan portfolio is achieved.Then, this paper introduced several risk measurement index, pointed out the advantages anddisadvantages when these indexes are applied to control the risk of loan portfolio, this paperis focused on researching how to control the concentration risk of loan portfolio.In the end, the model of medium and long term loans portfolio optimization is established.So we solve theoretically the problem for commercial banks that the industry concentrationrisk is oversized to one industry in issuing medium and long term loans.