Study Of Credit Risk Management Of State-owned Commercial Banks

Credit risk is one of the most ancient and most important financial risk forms in the financial market, and a major issue facing modern economic body (especially financial institutions), investors and consumers. It has been an issue of great importance in the financial filed of modern economy to analyze its causes in order to guard against credit risk.The main reason leading to credit risk of banks is the shortage and loss of credit in economic bodies. The basis of the shortage and loss of credit is the existence of limited rationalism and opportunism. By analyzing the shortage and loss of credit by means of economics, it is believed in this essay that we should start to guard against and control credit risk through uprooting the behaviour of credibility loss. To uproot the behavior of credibility loss, we can start from property right. It is necessary that we should attach importance to the setting up of rules and regulations, the introduction of biding system of ethics and moral into government laws and rules. We should also attach importance to the construction, administration and application of information.By comparison with the world advanced administrative system of commercial bank credit risk and drawing on the experience of administration of international advanced commercial banks, the essay puts forward the concept that the ideal administration of credit risk should be firmly based on regulations and technology, and construction of culture and external credit environment should also be included. Considering that the "soft rib" of risk administration of state-owned commercial banks lies in the poor condition of technology, the essay introduces and streams the administrative molds of capital and property formation of current world banks. To realize the ultimate goal of the administration of credit risk, namely, to balance the relationship between risk and profit of the administration of capital and property formation, the grading system such as "grading system of clients" and "classification of loan risks" become the important contents of risk identification, which starts from risk identification of single property risk.For the purpose of evaluating the grades of clients' credibility, the essay introduces the most famous Z model. Concerning the shortage of Z model, the essay points out the necessity of modification of clients grading system in a practical way, and offers the standards of modification of practical grading.According to the Bassel's agreement of new capital, and combined with the statue quo of the classification of loan risk of our state-owned banks, it is pointed out that the five levels of classification should be further streamed so that the changing process of loan quality can be clearly reflected and the tactics of Good Quality and Good Price which is priced according to the loan quality can be achieved.Except for the standardized qualitative analysis, the essay also makes attempted research into the forewarning system and prediction models of bank credit risk. In reference with the major earlier symptoms and index of agreement violation of loan put forward by Bosnian A. Roger, and combining the basic elements that influence credit risk forewarning of commercial banks, some key indexes have been selected to establish the prediction model of single loan credit risk. The model may serve as reference in the practice of controlling credit risk of commercial banks.