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Early Warning Of Credit Risk Of County Agricultural Bank

Posted on:2010-05-13Degree:DoctorType:Dissertation
Country:ChinaCandidate:Z Q ZouFull Text:PDF
GTID:1109360275485023Subject:Agricultural Economics and Management
Abstract/Summary:PDF Full Text Request
Finance is the core of modern economy, and county finance is the key of county economy growth. In China which is a large agriculture country, the role of county finance is important in handling the issues about agriculture, countryside and farmers. Agricultural Bank of China, which has the most extensive outlets in countryside, is a joint-stock bank controlled by the state, and has now just finished the transformation into stock-holding system, and its reform goal of commercial operation for agriculture, countryside and farmers indicates the agricultural bank will exert the role to support county finance. But due to the speciality of agriculture, countryside and farmers, agricultural bank will face greater credit risk compared to other commercial banks. Scientific early warning and effective prevention of credit risk of county agricultural bank is the purpose of this research bring about sound development of agricultural bank in supporting agriculture, countryside and farmers and county economy growth.Early warning of credit risk in county agricultural bank (taking branches in eight counties of Fuzhou as cases ) is taken as the theme of this research, and the theoretical analysis and empirical research are carried out along the logic sequence of putting forward, analysis and solution.At the stage of putting forward, on the background of China economy growth, from the perspective of urban-rural gap and transfer of government economic strategy center, the purpose and realistic significance of the research are elaborated. The research theme is analyzed and put forward from that the county finance is an important supplier for aiding farmers and county economy growth, and various risks of county agricultural bank in reform and development. On that basis the research method, content and technology line are given to offer a framework for the deepening research.At the stage of analysis, theoretical analysis is integrated with empirical research. Firstly the theory and methods are briefly introduced. In the aspect of theory analysis, the credit assets risk management theory, information anisomerous theory and financial fragility theory are dealt with to guide the following analysis and countermeasures. In the aspect of research method, measurement and early warning of credit risk in the western commercial banks are introduced. By comparison, the proper methods to construct indices system ( hierarchy analysis ) and for early warning ( gray prediction model ) are selected. The mechanism to produce credit risks in county agricultural bank is analyzed by the selected theories and instruments, and its characteristics are summarized. Accordingly the credit risk early warning indices system of county agricultural bank is constructed. The data from eight county branches of Agricultural Bank of Fuzhou are applied to carry out empirical research of credit risk early warning in county agricultural bank, and analyze the early warning results.At the stage of solution, according to the results of theoretical analysis and early warning, the countermeasures to prevent and control the credit risks of county agricultural bank are proposed in terms of conception, process, internal control and external environment of bank’s credit risk management..The conclusions of this research are as follows.(1)County agricultural bank’s credit risk occurs under the joint action of a series of internal and external factors, but its customers’fragility has made a complex and hard credit risk management, which leads to county agricultural bank different from other financial institutions in the credit risk management.(2)County agricultural bank’s credit risk gradually occurs and accumulates along with the links of credit. In the three links of investigation before credit, supervision during credit and following management after credit, the mechanisms to produce credit risk are different.(3)County agricultural bank’s credit risk characteristics tend to be generalization in existence, external system in source, outward spreading in effect and high correlation with other risks.(4)The results of early warning research shows that management of county agricultural bank is stable now, which indicates that it pays more attention to the credit risk management after stock-holding system reform, and it is related to the giving-up of its bad assets, which also indicates the important influence of government policy on the sound development of county agricultural bank. Therefore, in future development agricultural bank should strengthen management and coordinates its relation to the government, meanwhile the effects of credit risk management are restricted by economy and social factors and administrators’attention. Agricultural bank should increase risk awareness in management.(5)County agricultural bank’s credit risk should be prevented and controlled in terms of conception, internal control, choosing customers, collecting information, coordinating relationship, other concerning systems.The conclusions from the credit risk early warning research of county agricultural bank have theoretical values and realistic significance, and the innovations are as follows. (1) Credit risk early warning of county agricultural bank is taken as the research object. (2) County agricultural bank’s credit risk indices system is constructed, and gray prediction method is used to explore the early warning of county agricultural bank’s credit risk, which is seldom in literature. But some theoretical indices are adjusted for feasibility in empirical research, and the data from eight county agricultural bank branches in Fuzhou are applied to study the early warning of credit risk, the conclusions have local characteristics, which are not generalized enough and further researches are needed.
Keywords/Search Tags:county agricultural bank, credit risk, early warning, indices system, gray prediction
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