Research On Credit Process Risk Management Of Chinese Commercial Banks

With the international financial crisis led by the Toshitsugu credit crisis of 2007continuing to deepen, and the financial markets continuing to fluctuate, the real economy becomes worse and worse, countries have adopted a massive rescue package. So in 2009 the new agreementâ…¡(New Basel Capital Accord) were added by the Basel Committee, which includes comprehensive risk management idea of crisis response. But combined with theory, academic research carried out from the micro-level is some insufficient. At the same time, because Chinese financial system is still dominated by banks and credit business is the main source of income for banks, the corresponding credit risk has become the major risk it faces. This takes a severe challenge for Chinese commercial banks'risk management techniques and skills, which has been open up comprehensively since December 11, 2006. This makes it particularly urgent to study the credit process risk management.In this paper, on the basis of systematic analysis on the research background, the relevant theory and research situation of the credit process risk management of commercial banks, and from a realistic point of view, it analyzes the status quo and existing problems of the credit process risk management of the commercial banks. From the characteristics and performance of the process credit risk of the commercial banks, this paper puts forward the concepts and objectives, principles, ideas and frameworks, and the content and focus of the credit process risk management.The author uses the measurement method and neural network theory to build the identifying and quantifying system of the credit process risk management before loan. On the basis of credit risk identification, following a comprehensive, open, and practical principles, and combining qualitative and quantitative indicators, it builds the regression model of Logit ; based on expert thinking, non-linearness as well as the generalization of the neural network, it creates a state-space equation and determines the corresponding error critical value and convergence rate, builds a neural network-based risk identification and assessment model in order to effectively carry out the credit classification, and to accurately predict credit risk. Combining the national condition, it improves the investigation and approval system before loan.The author constructs the dynamic early warning mechanism after loan of the credit process risk management. From the perspective of the commercial bank, it takes full account of financial and non-financial factors, in accordance with the principle of the openness, cost-effectiveness, systematicness and predictability, building early-warning indicators of credit risk. With AHP methods, by building a hierarchy of indicators and assessment matrix to determine the index weights, and combined with the thinking of loan risk classification management, it builds comprehensive indicator models of credit risk early warning and risk early warning system. Using gray theory it builds a dynamic early-warning model of credit risk. In the system of early-warning after loan, it builds the inspection system, risk classification system and risk forecasting system after loan.From the perspective of risk compensation, it builds non-performing assets management system. To prevent the stock of risk, and from the solvency point of view, it defines the scope and settles the order of assuming settlement way, follows the principles and methods of the assessment of various types of assets and liabilities, in accordance with the steps of assuming settlement way to settle non-performing assets. From the institutional level, it builds well-established system of preservation of non-performing assets covering management, collection, performance evaluation and cost control. In addition, it also carries out the corresponding studies about the incremental risk control of non-performing loans. In the dynamic monitoring process, and from the view to prevent credit risk and operational risk, making it makes some strategies of commercial banks relating improving enterprise G2B e-government information, decentralization and transferring of risk, optimizing the internal control and others.Based on these theoretic studies, taking a state-owned commercial bank as an example, it carries an empirical research of the credit process risk management, which includes quantifying risks before loan, risk early warning in loan and bad credit asset management of after loan using theoretical thinking of the credit process risk management of the commercial bank.The systematic research, which includes commercial bank credit management, risk performance and characteristics, risk management theory, ideas and methods of the credit process of Chinese commercial bank, aims to provide scientific guidance in theory and support of methods and strategies for Chinese commercial banks to take the initiative to deal with complex dynamic environment, improve the level of the credit process risk management, and effectively prevent and dissolve the credit risk.