Research On Credit Risk Management Of China CITIC Bank

In 2007, the U.S. real estate industry caused by over-development of the subprime mortgage crisis, gradually evolved into a global financial crisis. In this financial crisis, financial sector bear the brunt of global financial institutions in this financial crisis was a serious shock, many of the world's top financial institutions suffered heavy losses or even bankruptcy or restructuring. Meanwhile, data from the China CITIC Bank, commercial banks reduced the number of foreign loans, domestic credit increased, in the same context of the financial crisis, domestic credit assets increase or decrease the domestic credit environment that the complex changes.The impact of changes in the macroeconomic environment on China's commercial banks is a dynamic process. After the financial crisis, the Central Bank implemented a loose monetary policy. The Ministry of Finance also carried out a 4 trillion rescue plan. Credit assets of commercial bank upwards rather than downwards. In the year of 2008 and 2009, the loans of CITIC Bank increased substantially. And in the same time, the degree of concentration of credit assets showed the high correlation with government policies. Therefore, the political risk of the credit assets increased. In the matter of measurement methods and management organization structure of credit risk, CITIC Banks are still using traditional customers rating methods and strict vertical management structure. There are big flaw in both areas. The measurement of credit risk is not precise and sensitive enough, which is not good for the risk-benefit assessment of the business. Total system of the hierarchy vertical management structure is too much, and the division line of business; id not clear, etc.Based on the real situation of credit assets of CITIC Bank, this paper discussed four issues faced by China CITIC Bank by comparing and analyzing in the financial crisis:the uncertainty of macroeconomic environment and the loose of monetary policy, high relationship between loan concentration and policies, backward technology of risk quantification, too many levels of credit risk management. Technology of risk quantification and management process are two long-existing problems of CITIC Bank. And these two problems become more prominent in the background of financial crisis. We should pay more attention to them in the age characterized by financial globalization. In order to solve the above problems, this thesis put forth three recommendations from the macro and micro level:to strengthen the study on macro-economy and the analysis on industry policies, to improve measurement methods of credit risk and to improve organizational structure of the risk management. However, due to limitations of the author's knowledge of theories and difficulties of data collection, there are two short points in this paper:there is no further study on the application of the management system of credit risk at the strategic level in CITIC Bank of application; there are not enough data sample, so we can not have a further precise analysis by using mathematical model. We hope that scholars who are determined to study this problem will have further contribute in this filed.