Study Of Risk Management Of Small And Medium Size Banks

This paper introduces the development situation and problem in small and medium size banks, illustrates the characteristics of the risk and the reasons that induce it. On the one hand we consider that the small scale, the higher cost of financing, the wrong orientation in the financial market are reasons that bring the risk., on the other hand we consider that the limitation of system, the unfair policy between the small and medium size banks and the state owned banks, the economy environment are reasons that induce the risk. The credit risk is the most important risk that the small and medium size banks should pay more attention. So this paper focuses on the credit risk. Based on value-at-risk we give an example of how to measure the credit risk and provide the process of applying this method in risk management. In order to build a risky prediction model, we select 4 financial indexes from 16; these are the ratio of bed debt, the operating cost, the asset-profit ratio and the liquidity ratio. At last we suggest that we should strengthen the risk management of small and medium size bank from five aspects. Including strengthen the inner control, improve the technique level of risk management, solve the problem of non-performing loan, adjust the credit orientation and structure, improve the outer operating environment.Risk management of small and medium size banks has a very large scale, this paper mainly deals with credit risk management. And hope to has its effect on risk management of small and medium size banks.