The Internal Control Research For Credit Risk Of Commercial Banks In China

The banking industry is the dominant industry of Chinese financial system. Credit business is the main of the commercial banks. The income of credit business is the main source of income. With the corresponding, the credit risk has become the primary risks faced by commercial banks.Since the1990s, domestic and international banking crisis sounded the alarm for the internal control construction of the credit risk of our commercial bank. Recently, even the main reason of the commercial banks in trouble is inadequate or defective internal controls system. Domestic commercial bank, the credit risk is one of the most important risks because of the credit business proportion of total revenue up more than half. Credit risks of commercial bank will not only bring losses but also caused commercial banks bankruptcy and failure, seriously can cause financial and economic crisis. In the Chinese banking system, the accumulation of credit risk and the various problems of internal control are critical issues in financial theory, at the same time, they are also focus on the commercial banks.The development of internal control in Chinese commercial banks started relatively late. And now internal control system has been preliminarily build full of coverage of credit activities and the entire process of supervise. But there are still many problems to improve. The research of how to strengthen internal control has become immediately to consider.This paper based on the theory of construction, maintenance and implementation of internal control system in commercial banks and combined with experience of foreign commercial banks. At the same time, A commercial bank for an example, combining theory with practice, analyses the present situation, problems and running effect of the current commercial internal control.This paper is divided into five parts:The first part, this paper mainly introduced the background and significance of research, research purpose, research ideas, research methods and expected contributions.The research is summarized in the second part, which mainly introduces the internal control theory of commercial bank of Basel Accord, internal control of credit risk, the risk of commercial bank, and relevant domestic and international literature review, basic knowledge of credit risk theory of commercial banks.For the third part, the purpose is to compare and learn from foreign advanced credit risk internal control of commercial banks. Through the analysis of the internal control system of commercial banks in the United States, France, Germany, summed up the reference in the domestic commercial banks.The fourth part, analyzing the internal control of credit risk is based on commercial bank. To analyze the case as the breakthrough point, this paper elaborates the system and operation of internal control of A commercial bank in detail and points out the problems. In a comprehensive analysis of case study and reference from the advanced foreign internal control system of credit risk that to put forward some suggestions and measures for B commercial bank.The fifth part is the conclusion of the study and suggestions. This part, through the analysis of the case, the paper is summarized the problems of the existence of the internal control system of commercial banks in China and puts forward the some improvement measures and suggestions.The main contribution of this paper is as follows:based on the analysis and evaluation of credit risk internal control system of A bank, the paper will suggest five aspects in order to improve the internal control, such as optimizing the internal situation, strengthening the risk early warning system, carrying out the separate approving and granting strictly, establishing the comprehensive system of incentive mechanism and evaluation mechanism to optimize the internal control system, in order to improve the control level of credit risk, reduce non-performing assets of credit, ensure the safety of fund, and with a certain degree of operability in practical application.