Credit Risk Management Of Agricultural Bank Of Shanghai

Finance is the principal of modern economy. The basic conditions of a sustained and healthy development of the national economy will be the efficient and standard development of finance system. In recent years, China accelerated the reform of the financial system and increased the degree of openness of financial sectors. So the domestic banking sector is faced with an international competition challenge. In order to keep pace with the increasing globalization of the financial industry, the following tasks became pressing:- to improve the quality of the Agricultural Bank of Shanghai (ABS);- to strengthen credit risk management of ABS;- to narrow the gap with foreign counterpartsCredit risk management is the main point of the department of risk management of ABS. The question of how to effectively guard against credit risk will be the most difficult work of ABS. The main objective of Agricultural Bank of China in 2009 will be the decreasing of the non-performing loan ratio to 20%. At the same time, a huge change of credit rating system will take place. It means that all the Agricultural Banks will use the 12 category loan classification system instead of five and Shanghai will be the example city of this new system in 2009. Because of this more difficult system, the quantity of loans will decrease. The solution can be the increase of quality and profitability of loans.Four parts are included in this text: 1) Type and definition of credit risk management; 2) Problems of ABS's credit risk management, including the actual situation and defect; 3) Enlightenment of??parison of ABS and foreign banks' credit risk management. (From Britain and the United States' developed credit system to analysis of the difference of ABS's and credit risk management systems); 4) Some proposals of countermeasures of how to strengthen credit risk management of China's commercial banks.This paper analyzes the ABS's credit risk management and existing problems. It proposes some solutions and models in combining with advanced international banks' credit system. The objective of this article is to discuss the best credit system and try to find one of them to practice to ABS in the future.