The Application Of Game Theory In China Bad Loan Management

During the rapid development of China's economy, commercial banks play an important role in it. But because of many factors, such as economical system, government, banks themselves and corporation etc., a large number of bad loan has accumulated in China's financial system and credit risk has been a biggest hidden trouble among all the risks. The China's government has noticed this problem and founded four asset management corporations (AMC) to solve the occurred bad loans. But as for the prevention of bad loan increase, there is still no quantitative, scientific analysis method and detailed , integrated research. So how to deal with the existed bad loan and prevent the increase of bad loan have been an important and practical problem. The research related to this field has not only academic but also realistic magnificence.Based on the analysis above, the thesis firstly introduces the basic status of China's bad loan, such as the definition, causes, impact on China's economy. Secondly after analyzing the bad loan management process of two kinds of country, we can draw a series of conclusion of bad loan treatment; Thirdly, the thesis introduce bad load treatment method (AMC) and four means of existed bad loan's disposition. Then we refer to the China's commercial bank loan procedure and international credit risk management method, after comparing this methods, we can draw a conclusion that there is great game character between loaner and loanee. Therefore this thesis adopts two analysis method: screening technology and and loan contract design and uses Lingo to carry out the quantitative analysis. Based on this course, a model was introduced into the process and this is the innovative point of the thesis .When writing this thesis, a large number of literature and information of screening technology and loan contract design. This thesis applies the game theory into the research course and uses economy, operational research and monetary theory as supplement theory. In short, there is breakthrough in the former research and I hope this can be helpful to other researchers and provide some new technique of bad loan prevention.