Research On The Credit Risk Management Mechanism Of The State-owned Commercial Bank

One of the important problems that any commercial bank is faced with is the risk of credit assets. So how to further study the risk of credit assets becomes an eternal and profound topic.In the early 80s of twentieth century, owing to the influence of debt crisis, international bank line of business began to lay stress on keeping lookout and managing credit risks. In the 90s, several crisis cases which were shocking to global banks and financial institutions (such as the case of Bahrain Bank and the case of Dahe Bank) caused people to pay close attention to market risks. Many principal international banks began to set their systems to measure internal risks and arrange capital. In recent years, realizing that credit risks are still the key financial risk, some great banks, such as the bank of JP Morgan, come to set their eyes on measuring credit risks and try to build internal methods and models to measure credit risks. Since Asia's financial crisis broke out in 1997, the composite model of market risks and credit risks, the problem on quantitating operational risks and overall pattern of risks management have drawn people's more attention.Considering our country's situation, state-owned commercial banks have referred to others' experience and taken some measures to strengthen the management of credit risks so that they could improve the quality of assets. Meanwhile, the government takes the policies of inputting capital and exfoliating bad credit assets. However, the problem lies in that after the government is burdened with the four state-owned commercial banks' quantities of bad loans, new bad loans still increase at a great proportion, the state-owned commercial banks' ability of resisting risks is still weak. So after taking part in WTO, these banks are faced with severer situation yet. What are the essential reasons? Based on ten years' work experience on credit, applying the basic theories of economics of money and finance, the writer thoroughly analyzes the reasons that the state-owned commercial banks' bad loans come into being and points out the disadvantage of present management of credit risks. Applying the principle of dynamically examining and verifying risks, setting the system of managing risks, the writer also frames out commercial banks' mechanism of managing risks.This thesis can be divided into five parts. At the beginning, it puts forward the concepts of risks, credit risks, risks of credit assets, analyzes the problems and pressure that our country's commercial banks are faced with from four aspects that objectively exist, further explains that it is actually very significant to improve the management of credit assets. The second part illustrates the foundation that the management theories of credit risks could be founded. According to the characteristics and regularities of credit capital's movement, it drafts out the methods of managing risks in terms of banks' rights of controlling credit assets. According to construction states of bad credit assets, based on the characteristics and regularities ofcredit capital's movement, the third part analyzes the internal and external contributing factors of our country's bad credit assets. Comparing with our country's banks' operating, the fourth part introduces experience of managing risks in Singapore and puts forward the concerned enlightenment. The fifth part points out the overall principles and analyzing models of setting mechanism to manage risks of credit assets. Through founding and improving system of controlling from within and strengthening the ability of recognizing risks, combining qualitative analysis with quantitative analysis, it sets a series of mechanism that can systematically analyze problems with obvious targets and the ability of quick response.