Credit Risk Identification Of Commercial Bank In China

As the economic and financial environment changes, the methods of the risk management for the commercial bank also changes a lot. Identify the potential risks is the fundamental and the first step to control the credit risk. Using the contrastive analysis method, we can draw a conclusion as flowing: the risk identification, especially the analysis of non-financial factors has been highly regarded in western bank. However, it has not yet been giving enough attention in Chinese commercial banks. Furthermore, very little research has done in this area.The authors of this study used survey and questionnaire as research methods to investigate how Chinese commercial banks identify and thus control their credit risks. The paper probes into several challenges being up against domestic commercial banks in their risk identification system. First, identify the credit risk fundamentally by financial report analysis is insufficient, Second, the index and weighting of the analysis of non-financial factors is inadequate, Third, lack of good credit culture.A creative point of view is proposed based on the research data: Chinese commercial banks should enhance their risk management by upgrading the risk identification ability. Identify the credit risk should be forward-looking and strategically. The paper tries to propose forward a general framework for credit risk analysis, and in order to reveal all the risk factors, banks should use a four-step approach, that is from industry, management ability, financial reports to credit standing to get risk sources. Then, The Yunnan Aluminum Stock Company was selected to practice the preceding argumentsWith the preceding research, the paper puts forwards several solutions to improve and optimize the method of identification for Chinese commercial banks. First, stress analysis of non-financial factors, both in thoughts and in actions, second, establish invigorating oriented value axiom, third, enhance diathesis of credit practitioner, fourth, strengthen the research of institutional culture.