Common Agency Problem In Corporate Customer's Credit Of Hunan Commercial Banks

Corporate customer is defined as the customer base which consist of independent legal entities, and between these independent legal entities, there are relationships of control, controlled by a third party, or some other relationship, so the assets and profits may not be transferred at fair value between them. In recent years, as economic development of Hunan Province, a number of enterprises through the formation of group, have become the important customer base of all commercial banks to expand. However, when the corporate customers bring greater benefits to commercial banks, they also hide huge risk.Common agency means the agent model of multi-client hiring a same agent. Commercial bank credit to the corporate customers is essentially a common agency problem, free-riding phenomenon of group lending and external effects of loans would lead to excessive credit to the corporate customers.At first, this paper combs research about commercial bank group credit management from home and abroad, and then set up the basic theory model of common agency of commercial banks in the credit markets in the corporate customer's credit, analysis the optimal contract design of commercial banks in the corporate customer's credit. On this basis, combined with the common agency theory, and through specific cases, including the Hongyi Group, and Delong Group, this paper analysis existing problems and deficiencies of Hunan Province's commercial banks in the corporate customer's credit; by combing through the specific cases, this paper analysis why there is common agency problem in Hunan Province's commercial banks credit behavior to the corporate customer: the competitive credit market led to serious asymmetry of information between clients, so the commercial banks adopt a different performance evaluation criteria, and accumulate corporate customer's credit risk; from the three aspects of risk management policies and procedures, risk management and regulatory experience, introduce risk management experience of international commercial bank credit for the corporate customers, sum up the revelation of corporate customer credit management in Hunan Province. Deal with the common agency problems needs three aspects: internal management of commercial banks, external supervision and syndicated loans.