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Researches On The Causes Of The Credit Risk Of State-Owned Commercial Banks & How To Prevent It

Posted on:2003-03-31Degree:MasterType:Thesis
Country:ChinaCandidate:Y F LaiFull Text:PDF
GTID:2156360062996270Subject:Western economics
Abstract/Summary:PDF Full Text Request
Researches on the causes of the credit risk of state-owned commercial banks and how to prevent it are up to date and of very realistic value in theory. The basic viewpoint of this thesis is that the limited senses of economic man and the incomplete information of markets are the fundamental causes of the credit risk of commercial banks. On the basis of it, this thesis firstly divides credit risk into institution risk and market risk and then separately analyzes the institution causes and the market causes of the credit risk of state-owned commercial banks. Finally in according to the analysis this thesis comes up with some relevant measures to prevent the institution risk and the market risk. Some main conclusions of the analysis and measures are as follows:l.The institution causes of the credit risk of state-owned commercial banks: (1) The property right institution of state-owned commercial banks causes the problem of null owners and enable government to monopolize the property right of state-owned commercial banks. First, this gives birth to sovereign credit risk; Second, this results in the exterior problem of the property right structure of state-owned commercial banks which destroys the incentive and restrictive functions of property right; Third, the administration put on state-owned commercial banks excludes the supervision implemented by central bank. (2) The interior control institutions of state-owned commercial banks are imperfect, so thesituation of the moral hazard of state-owned commercial banks is very serious.2.The market causes of the credit risk of state-owned commercial banks: That the reform of interest rate liberalization is going on and our country became a member of WTO will make the loan market of state-owned commercial banks become more and more open. On the one hand, it is more difficult to expect credit risk; On the other hand, the adverse selection and moral hazard of debtors are inspired.Because of that markets depend on property right institutions, the credit risk of state-owned commercial banks is mainly institution risk. The essential measures to prevent the credit risk of state-owned commercial banks are as follows: First, it is supposed to rely on institutional measures to reform the property right institution of state-owned commercial banks to make them become joint-stock companies limited and better the interior control institutions of them by reinforcing their organization control, authorization management and interior supervision. Second, technical measures should be carried out to improve the systems of risk appraisal, aversion, spreading and prediction.
Keywords/Search Tags:state-owned commercial banks, credit risk, property right institutions, interior control, incomplete information
PDF Full Text Request
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