The Research Of Housing Loan Risk Prevention In Chinese Commercial Banks

The core of assets business of commercial banks is risk prevention,with the vigorous growth of individual housing loan,credit assets risk control has attracted more and more attention by commercial banks. Risk has significant impact on the operation performance of modern commercial banks. Banks, which are pursuing maximum profit, must manage the relationship between business growth and risk control. Only the development with risk control is sustainable development, only the profit with adjustment of risk is the real performance indicator. The existence of risk does not necessarily result in loss, it is just potential loss, which will turn into real loss under some certain circumstances. Commercial banks should keep the risk in affordable range via risk identification, risk measurement and risk management, to insure the sustainable development of individual housing loans. This paper shows the case study of the individual housing loan business in China Construction Bank(CCB). On the basis of theories of credit risk, market risk and operational risk prevention and control, this paper describes the history and current status of the individual housing loan business of China Construction Bank, illuminates current product system, and analyzes the omissions and deficiencies in product system and business operations. Moreover, this paper analyzes the affordable loss of CCB under the stress testing of simulation of housing price decline. And all the data is base on current housing loan of CCB Sichuan branch. Finally, this paper provides advisory opinions for the steady operation of the individual housing loan business in commercial banks.By the end of Dec.2013,the housing loan balance of4major domestic commercial banks(BC,CCB,ICBC,ABC) is nearlyï¿¥8000billions,1200billions is increased this year. Facing such huge individual credit asset, the pressure of commercial banks management is much more heavier. Therefore, this paper studies risk control from the perspective of commercial banks. There are5 chapters in the paper. Chapter1introduces the purpose and significance of this research, domestic and foreign theories, and research methods. Individual housing loans in CCB is the case study in this paper. Through the research of individual housing loan risk prevention and control theory, this paper provides the advisory opinions for the risk control of individual housing loan business in commercial banks. Many methods are adopted in this study, such as literature analysis, comparative analysis, case analysis, management analysis, and structure analysis. Chapter2focus on the research of risk control theories and methodologies of modern commercial banks, mainly studies the3decisive risks (market risk,credit risk,operational risk), studies the unique risk of individual housing loan with consideration of its own features, analyzes the problems the individual housing loan in CCB. Chapter3discusses the history of individual housing loan business in CCB, and analyzes some important guiding documentations ("The guideline of China Construction Bank individual housing loan center ","The operation procedure of China Construction Bank individual housing loan","The responsibility description of China Construction Bank individual housing loan"). Chapter4estimates CCB-acceptable loss range based on real estate risk stress-testing model for individual housing loans. Chapter5summarizes previous discussion and analysis, points out the problems of risk prevention and control in current individual housing loan business, and proposes reasonable suggestions for risk prevention and control of the business.