Controls And Causes Of Commercial Banks' Bad Loans At The Period Of Economic Transformation

Bad loans and the aroused financial turbulence are a universal problem, which has been under studying in many countries years ago. Various measures have been taken to settle it. Chinese commercial banks are also up against such a situation. With the development of domestic economy, how to avoid and solve the problems has become an essential task.The reform, starting from the year 1979, bring about a huge difference of the economic system from the past. Especially since the year1992, after our final goal is emphasized to establish a social market economy, the changing characteristic of economic system is becoming more and more obvious. That is the change from the planned economy to the market economy.Just at this period of time, domestic huge bad loans are attributable to the comprehensive causes. The external reasons are the country's policy, the defects of financial system and credit risks. The internal reasons are the inner control defects of the banks, operational risks, and the mismatched quality of the stuff. The key to crack the nut includes deepening reformation of financial system and improving banking management. This paper, through analyzing causes of bad loans, try to make some explorations in this area.First of all ,this paper gives a overall introduction about bad loans theories , identifying the transformation concepts and characteristics and describing the situation on bad loans. Based on the theories above, the paper analyses the internal and external causes bringing about the bad loans. Then ,the paper offers some popular methods to deal with the bad loans ,together with some operational measures to defend the bad loans. Finally, through a vivid case from Zibo commercial bank , give a concrete test on the theories and methods mentioned former .The seventh chapter, focusing on analyzing the case of Zibo commercial bank, is a test on the former theories and methods mentioned in this paper.Based on the research results, come to the conclusion: the key on dealing with bad loans is to identify and analyze it at an early date.