Study On Internal Rating Of Credit Risks Of Business Banks

The paper centers on internal rating of controlling credit risks of business banks. The New Basel Accord emphasizes the application of internal rating of business banks. It is that business banks determine the minimal capital requirement by using internal credit rating system of banks and ensure sufficient capital of banks. It is an approach of special risks of banks. Based on the present situation of the construction of internal rating system of China business ranks, the paper studies on the gap of competition between China business banks and foreign ones. Based on the analysis of the operation theory, necessary data and advantages or shortcomings of two typical internal controlling models of international banking, related to the present situation of China business banks, the paper put forward a model of internal controlling credit risks suited China business banks, which is the center of that. Based on the foundation of the loans composition, historical data of violating treaty, the frequency of violating treaty of calculated loan expectance and real regained proportion of violating treaty, the model calculates the expected and unexpected credit loss of loans or loans composition, differentiates and confirms the loans price of China business banks and improves the controlling credit risks function that has fixed significance. According to the present condition of the development of internal controlling credit risk of international and domestic banking, using the means of theory related to practice, the paper introduces the current internal rating of credit risks of international bank and probes into the difficulty and possibility of internal rating used in China business banks. Besides, the paper presents the relevant applied model of internal rating used in China business banks and put forward countermeasure of the model of internal controlling credit risks. Beside foreword and conclusion, the paper is divided into five parts. Part I: This part introduces the condition of bank credit risks and the characteristics and connotation of internal rating. Part II: This part simply concludes the theory of controlling credit risks of foreign banking and summarizes the situation of practical controlling credit disks of several foreign banks. Part III: This part introduces current VAR of international banking and the typical models of internal controlling credit risks and analyzes these applied thinking and advantages and shortcomings. Part IV: This part the applied urgency of the application of internal rating and the construction of internal controlling credit risks model on the current situation in China by analyzing the problems of internal rating of credit risks of China business banks. Based on the current data foundation of China business banks, a model of internal controlling credit risks is set up by using the model theory of violating treaty. The paper explains the theory of model movement and it's advantages compared with five grades classification (standardization) of China business banks. This is the key part of the paper. Part V: This part studies on the practice of internal rating of China banks and the current difficult point of the model of internal controlling credit risks. At last, the paper set forth the countermeasures of improving the practice of internal rating of China banking through seven respects.