The Research On Credit Risk In State-owned Commercial Banks Under Information Asymmetry

In modern society, banks, especially the state-owned commercial banks, should learn how to keep in advance in the competitive market. Credit risk, one of the common risks in commercial banking operation, would negatively effect the banking operation at a great degree. Generally speaking, the existent of information asymmetry is the main factor that results into credit risk of banks.In the first part, this thesis concluded related foreign research and domestic research about the application of theories of information asymmetry to credit risk management of commercial banks. In the second part, it introduced several concepts concerning credit risk of commercial banks and information asymmetry. In the third part, it described several kinds of information asymmetry that exists in credit business of Chinese state-owned commercial banks. In the forth part, it analyzed that information asymmetry between sated-owned commercial banks and small-medium size enterprises resulted into serious diverse selections and moral risks based on the fact that loan of small-medium size enterprises caused more credit risks. And it explained how information asymmetry caused credit risk of commercial banks. Lastly, the thesis made several helpful suggestions to improve the management of credit risk of stated-owned commercial banks based on the theory research and the case study.This thesis made out creative analysis on credit risk management of stated-owned commercial banks under information asymmetry as follows:(1) It pointed out that banks can set for claim for compensation in credit contracts, so that companies that breach the faith would be published once the breach occurred.(2) It suggested that banks can set committees in companies to supervise the application of capitals, in order to make sure that specific capital should be used in specific projects.(3) It advised that special departments, acting like independent directors, can be set by banks enterprises to supervise the shared information, so that to decrease moral risk.According to the theory that the information asymmetry can result into credit risk in credit businesses, this thesis made some suggestions in the view of principles to help state-owned commercial banks to reduce the loss caused by credit risks.