Study On Application Of Loan Pricing Methods In Credit Risk Management Of Commercial Banks Under The Condition Of The Marketization Of Interest Rate

With the Chinese financial industry full opening to the foreigner, the completely marketization of interest rate is not far away.On the one hand this mean the financial institutions will have a bigger right to the pricing of the loan, they will be able to determine the interest rate according to the loan risk and to manage or prevent financial risk.On the other hand,once the interest rate completely lets loose,the commercial bank must independently make the loan price and also mean the commercial bank must undertake the risk of independently pricing.Now our country commercial banks haven't prepared for it.Our commercial banks have already realized this question but have not resolve it.The main purpose of this article is to suggest a theoretical support for our banks to improve loan pricing.The structure of my paper is as follows:Having a better command of the history and current situation of loan pricing in China is very significant for us to find the proper way of pricing loans.So in the first chapter,I discuss the interest rate reform history,in other words,the history of loan pricing in China.Then l discuss the meaning of getting research into the topic.The second part introduces the basic content of loan pricing and the theoretic basis of loan pricing.Then the basic principle and influencing factors is analyzed,which is the theoretic basis of the following loan pricing in china.The third part of this paper focuses on the current situation of loan pricing.It analyzed our country commercial bank present loan price policy as well as the method,and conclude the progress and the question in the loan price.According to our country actual situation.the last part gives two pricing models:cost-plus pricing model and the customer profit ability analysis model by learning from tire western commercial banks tradition loan pricing model, by the guidance of economic capital-the modern bank risk management core technology.It could be referred by commercial bank.Then it mainly research on the foundation of loan pricing model,which includes risk premium,cost of funds,operation cost,supposed profit.In this thesis,the default rate can be inferred by using the historical data of bank risk division,the data of cost of funds can be got by using the funds transfer pricing.and use the activity—based costing to calculate the operation cost.A11 of these works are useful to the research on the loan pricing in the liberalization of interest rate.The major resource of bank's profit is margin between deposit and loan rate in our country. As the commercial bank's traditional service, the loans born with credit risks because of which principal and interest possibly can not call in. How to manage credit risks is a key problem which commercial bank must face continuously in our country. At present commercial banks manage credit risk mainly by evaluating enterprise credit rank to establish credit admittance standard and separating the loan operation to reduce operation risk. The interest rate liberalization will change the type of credit risk. Besides the traditional risk of credit and operation, the interest rate risk prominently reveals. The fund cost and all kinds of credit risk. How to reasonably valuate for loan becomes an essential question to control credit risk. But the commercial banks have not established loan pricing system and do not have skill to formulate loan price in our country. Many overseas commercial banks already formed completed theory system and technical method relating to interest rate risk management. It provides advanced risk-metric technology in order to adapt interest rate liberalization and to perfect credit risk management system for our bank. In the recent years, the advance of interest rate liberalization marches into substantive stage in our country. The inelasticity of the credit risk management system appears day by day. The commercial bank need to consummate its credit risk management system if it want to be in an impregnable position in the advancement of interest rate liberalization reform entered the substantive stage, then researched the influence of the interest rate liberalization to the commercial bank and the credit risk administration, analyzed how to adapt the interest rate liberalization reform on own initiative from commercial bank's angle and proposed the specific measures, to establish science formulating loan price mechanism and strengthen the interest rate risk guard function in the credit risk management system.