A Research For Consumer Credit Risk Of Domestic Commercial Banks

Domestic commercial banks are facing opportunities and challenges that they have never met as China has joined WTO and the foreign banks are entering domestic financial markets. Particularly, when the domestic financial markets were all opened in 2006, domestic commercial banks had to compete in the more severe market conditions. Consumer credits are fully-fledged financial businesses developed by the commercial banks in the western developed countries. The businesses have been supported by the policies of governments, the strong law systems and the perfect credit systems in western countries. Evaluation model for consumer credit risk and the electronic approval system are widely adopted by the foreign commercial banks. The foreign banks put emphasis on risk auditing and risk controlling portfolios with the targets of optimization of risk managements. They have achieved detailing managements in consumer credits business and controlling all kinds of relative risks effectively. All these ways of risk managements have promoted the development of consumer credit business.In recent years, Chinese commercial banks have had a great achievement in consumer credit business. All the domestic commercial banks have made a great deal of revenue through the business. Consumer credit business has become one of important credit businesses for each commercial bank has to compete. However, the risk of the business has increased as the businesses are expanding. This article has quoted some cases of developing consumer credit business by domestic commercial banks in order to put forward some suggestions and proposals aiming at solving the problems of risk management of consumer credit business in domestic commercial banks, with the consideration of development statements of consumer credit business in domestic financial markets and the success experiences of the foreign commercial banks. The suggestions and proposals are practicable for domestic commercial banks to distinguish and control the risk of consumer credit business.