Innovation Research On Credit Risk Evaluation Index System Of Commercial Banks

As the changes in economic structure of China,financial reform and financial innovation are pushing forward,the market-oriented reform of interest rates has been accelerated and the internet finance has been emerging continuously.The relationship between market entities is getting closer and the competition is getting fiercer.In 2008,the financial crisis sweeps across the whole world,violent volatility happened in global financial markets,though this global financial crisis have not cause very serious influence on Chinese financial market for the government have paid 4 trillion bailout,it makes people deeply aware of the interaction between banking credit risk and the financial system,even though the national economic operation.Usually,regulators use the non-performing loan ratio to measure the credit risk of commercial banks,however,the non-performing loan ratio published by banks is the value after disposition or after transferred.Although,many scholars have questioned the authenticity and the effectiveness of this indicator,few have proposed more effective measures of banks' credit risk.Therefore,it is of great theoretical and practical significance to innovate the index of nonperforming loan ratio to optimize the bank credit risk evaluation system.This paper inherits and develops the previous research results,combining with loan migration rate which is a unique index in China,builds up the index named Nplr_B(Nonperforming loan ratio before disposal)and calculates its value.In order to discuss the advantages of the indicators,this paper studies that as a single credit risk evaluation index,the Nplr_B's and the Nplr_A's(Non-performing loan ratio after disposal)effect on failure risk and X efficiency respectively.We use information economics theory,behavioral finance theory,game theory and other theories to analyze the reasons for the differences.Through the empirical test,the Nplr_B as a single credit risk evaluation index does have a greater impact on the bank failure risk and X efficiency than Nplr_A.From the perspective of a single indicator,the necessity of using the Nplr_B for credit risk assessment is preliminarily verified.Based on the evaluation index system of the credit risk of commercial Banks by domestic and foreign banking regulatory institutions and major credit rating companies,considering the actual development of China's banking industry,this paper establishes a credit risk evaluation index system for commercial banks.In order to further verify the necessity of Nplr_B in credit risk assessment from the perspective of the indicator system,this paper respectively incorporated the Nplr_B and Nplr_A into the credit risk assessment index system,and adopted the entropy weight-topsis method to evaluate and compare the credit risk status of commercial Banks.The results show that for most banks,the evaluation result of the index system containing the Nplr_A is better than that of the index system containing the Nplr_B.This further verifies the necessity of credit risk evaluation with Nplr_B from the perspective of indicator system.In order to make the indicator system centered on the Nplr_B be more effectively utilized by the regulatory unit and commercial Banks,this paper further explores the influencing factors of the Nplr_B according to the loan reluctance theory,financial fragility theory and other theories.The main conclusions of the study are as follows: the Nplr_B is affected by bank size,diversification level,cost income ratio and number of highly educated employees,and positively correlated with diversity level,and negatively correlated with bank size,cost income ratio and number of highly educated employees.It is a systematic project to strengthen the credit risk management of commercial Banks,which requires both the regulator to carry out more strict supervision and commercial Banks to carry out more strict credit risk management.The strategies for the regulators including improve the information disclosure system,improve the internal evaluation system of credit risk and supervise the credit risk of commercial banks according to the current economic situation.The strategies for the commercial banks including improve the credit risk management system,attach importance to the building of internal credit culture and strengthen the building of the talent pool.