Commercial Bank Real Estate Credit Risk And Prevention

In a background of quick development among the national GDP, urbanization and housing system in China, realty has been facing a rapid development future and becoming an important factor for national GDP and consumption. Meanwhile, real estate credit business in commercial bank has been going through a fast growth, which has been contributing and supporting the realty business meaningfully. Unreasonable increase of realty is facing unpredictable risks, which has become a threat for the real estate credit business in commercial bank. So. government issued measures against the increase, a real estate company is required to prepare more own fund. Down-payment for mortgage loan has been increased to 30%. With all measures government plans to make the risk under control, to ensure the credit business function smoothly, and break the threat from the over heated realty. Therefore, it is theoretically and practically meaningful to study the risk of realty.With a general analysis of realty and real estate credit business in China, this article is going to summarize major risks of realty credit business, such as: macro policy risk, market risk, business operation risk, commercial bank operating risk, credit risk of loan borrower and risk of realization of mortgage. With a base of intensive analysis of risks, this article points out major causes for the risks, including periodical fluctuation of realty, unreasonable dependence on commercial banks, weak risk control management for bank. This article also illustrates some instances of threat caused by realty risk, which may carry out bankruptcy of bank, or even unsteadiness to society and economy. This article ends with series of suggestions and anti-risk measures, including general construction of financial circumstance, effect anti-risk control system and management, and housing mortgage loan securitization for banks.Conclusion of the article is that realty credit business is facing various risks, which are required banks to pay more attentions and set up a realty-oriented management. This management is aimed to standardize its operation, to control risk, to ensure smooth function, and reasonable development. Gradually the realty credit business becomes pluralism, standardization, and quantification, in a sustainable way for future.