Analysis On The Application Of Credit Risk Quantificational Management In Domestic Commercial Banks

Credit risk management is the most important task in commercial banks'management. Nowadays advanced banks in the world have changed their credit risk management from qualitative analysis pattern to quantificational analysis pattern by using mathematics models. Each of these credit risk measurement models can provide important reference data for risk management, credit decision-making of commercial banks, and plays an important role in the early risk alert system in banks as well.But domestic commercial banks still use simple credit grades method in their credit risk management. With the financial tools diversified day by day, and the bank services more and more complicated, this method could not reduce the banks'loss effectively. We need more advanced methods to improve the credit risk management in our country. Under the background of banking industry opening to the outside world in all business fields, domestic banks face much more intense competition, so they should learn advanced experience from international banks to improve their credit risk management , transform the qualitative analysis pattern to quantification management pattern, reduce the loss of loans as far as possible.In this paper, the author used contrast analysis method and quantificational analysis, elaborated the contents of the credit risk quantificational management, and cited many accurate materials to describe the development of the risk quantificational management in domestic banks.This paper mainly introduced the thinking method of the credit risk measurement models such as KMV model and CreditMertics model instead of accurate calculation because the lack of data. The article also analyzed the possibility of using the credit risk measurement models in domestic banks on the realistic foundation, finally proposed feasible policy suggestion. The innovation of this paper lays in the proposition that domestic banks shouldn't use credit risk measurement models immediately in the current stage, and using credit grade card technique which developed from credit grades system in credit risk management is a realistic way. Simultaneously, large-scaled domestic banks should develop credit measurement models which can fit their actual situation. In this way, the risk quantification management can be achieved smoothly. In the author'opinion, the KMV model is more feasible when effective historical data are short.Because of the limitation in learning literature and the lacks of loan data from domestic commercial banks, this paper has not been able to make demonstration analysis to test the model validity. And this article mainly researched the credit risk management of enterprise customers, and made little discussion on that of individual customers.