Study On The Risks Of Personal Financing In Chinese Commercial Banking

Personal financing business of commercial banks has been developing fast in recent years based on the following two reasons. One is the fast creating process of commercials banks owing to the finance open policy and internalization trend. The other is the increasing personal income and desire for the professional financing service. The bull market appearing at the end of 2005 becomes a great achievement of personal financing business.But on the other hand, a lot of problems of domestic financing business arise owing to the limit from financing law regulation, management system and finance market development level. Also blind and cut-throat competition brings new risk to commercial banks. Generally speaking, Chinese people do not have good knowledge of risk. They consider bank to be the synonym for safety and guarantee. This increases risk to financing business. Thus research on how to deal with those problems, strengthen supervision and improve risk management on financing business, promote education of risk awareness becomes foundation of a healthy, regulated and sound development of commercial bank financing business.This paper studies risk problem of China's commercial bank personal financing business through combining theory to practice and making comparison between domestic and international situation. The main content as follows:In part one, introduction of commercial bank personal financing business. The concept of personal financing business is demonstrated through analysis of relevant papers. The present situation of personal financing business is analyzed based on development background of China's commercial bank personal financing business.In part two,analysis of risks of China's commercial bank personal financing business, including law, reputation, personnel operation, flow and exchange rate risks.In part three,propose how to avoid risks of China's commercial bank personal financing business. Firstly introduce experiences of developed countries and regions, such as America, Japan and Tai Wan. Based on their experiences and China's situation, countermeasures are proposed for both supervising party and supervised party.