The Research On Internal Rating System Of Commercial Bank In China

Internal credit rating of the commercial banks, mean that the department and persons of credit evaluating depend on data foundations and use methods to analyze debtor's ability and will of fulfilling the contract on time, and the risk level of financial transaction of contract, then regard this as the reference basis of credit decision. Internal credit rating needs to structure a system, which includes collection and treatment of dates, determination of internal risk rating and measurements of default and loss etc. This system is the internal rating system of the commercial bank.The foreign commercial banks have set up during the process of development, and upgraded their internal rating system under the framework of the New Basel Capital Accord and under the request of the Internal Ratings-Based Approach (IRB). Regardless of organization framework of risk rating, the method of internal rating, the choice of rating structure or the application of rating result, all embody the advanced idea and technique of risk management. It provides guidance to china's banking about how to strengthen risk management.Compare with international banking of developed country, the internal rating system of China's commercial bank has sizable differences, which limit the function of the internal rating in controlling credit risks. There are several problems existing in the process of china's bank setting up internal rating system, such as no data tracking in the debtor or loan's rating, lack of statistical model, perfection of the information management system; lack of rating's level that lead to hard to discern risk and lack of quantity rating methods, etc.Internal credit rating is the core of the risk management system of commercial banking. To the main problems existing in the internal credit rating works of our commercial banks at present, we should design and perfect the internal credit rating system around basic links, such as setting up risk rank, credit rating method, credit rating procedure, etc. It is essential for china's banking to learn advanced methods from abroad to improve internal rating system.