A Study On Credit Risk Management Of The Commercial Banks Of China

The credit risk is one of the most ancient risks in the financial market. According to the investigation of Mckinsey, it stands sixty percent of the overall risk exposure in the commercial bank. Therefore, whether the operation of commercial banks would be successful or not will mainly depend on whether they have the appropriate measuring approach of credit risk or not.The commercial bank initially inclined to use the qualitative analysis to evaluate the credit risk. But along with the continuous fluctuation of the financial market environment, the credit risk has enlarged increasingly. The original method became outdated, how to measure and manage the credit risk more accurately becomes the one of the biggest challenge to the commercial bank. Therefore, the developed countries leading by the United States have developed a series of advanced models to measure and manage the credit risk, such as Credit Metrics model, KMV model, Credit Risk+ model, Credit Portfolio View model and so on.Under the international background of the new International Convergence of Capital Measurement and Capital Standards, modern measuring approaches of the credit risk proposed by BIS brought the huge benefit to some international active banks. But because of the reason of the history and system our technique of credit risk management falls far behind the developed countries'. Therefore to reduce this margin and strengthen our commercial banks' competitive capacity, we should make the thorough research on these approaches.The main object of this dissertation is to enrich our measuring theories of credit risk, analyze the possibility to apply the modern measuring approach in our country and give the proposal towards the application of these approaches.