The Anatomization Of The Housing Credit Risk Control

The real estate industry which has been developing at high speed in recent years has become an important force in expanding the domestic demand and pulling the economy growth. This industry has played a positive role in pushing the national economy development and improving the people's living standards. The real estate industry which is characterized by the need of large amount of funds and long turnover period of funds needs strong the support from the financial industry in the process of production, circulation and consumption. Compared with other loans, housing loans provided by commercial banks have many special risks. If a good risk management mechanism is not established, the financing institutions that provide housing loans are easily exposed to risks, and then the chain reaction will occur, which will threaten the a safety of the whole financial system. Our country starts housing loan business later than others; it is restricted by many external conditions such as national policy, readjustment of economic structure, regional difference, the transition of bank management, and etc. The risk problems are particularly serious. It is therefore necessary to develop and set up a risk management system of housing loans which adapt itself to the transitional period of our country.This paper is based on the housing credit practices in recent years. It summarizes the experience and lessons. Through the anatomization of the operation mechanism of housing credit and a systematic research of the risk control and management methods of housing credit, and on the basis of introducing the traditional loan risk management methods, this paper mainly analyzes the market risk, credit risk, and liquidity risk, operation risk of the housing credit, and according to the reference standards concerning credit risk measurement in the Basel Capital Accord, this paper analyzes the housing credit risks by employing the credit risk measurement model (Credit Metrics) established by J.P Morgan (1997) based on Var, the KMV model based upon option theories established by KMV Company, and through the Credit Risk Model developed by the Swiss Credit Bank based on the insurance calculating methods. On the basis of full introduction and analysis the structure and operations of risk management system of the housing credit risk control in developed countries, the paper puts forward some ideas and methods concerning the construction of housing credit risk control system in China's accelerating its transition to the market economy system, which can provides references for China's financial institutions when they make policy decisions. This paper attempts to make up the regional gap and weakness in the research of housing credit (especially development housing credit) risks. Meanwhile, this paper also facilitates the financial institutions to enhance their consciousness and ability to prevent the housing credit risks, and helps them acquire and understand more modern techniques in risk measurement and management, thus promoting the standardized, stable and healthy development of housing credit business.