Research On Measurement Of The Economic Capital For The Management Of Credit Risk In The China Construction Bank

The China Construction Bank introduced the concept of economic capital in 2001, and has been implemented coefficient method based on the economic capital's budget and management over the past few years, playing a positive role in controlling the total amount of risk assets and setting up capital constraints. However, as banks improve their management of risk, the current measurement method of economic capital has become increasingly unsuited to the needs of the credit risk management needs, and compared to international practices, there are also many shortcomings.Based upon describing the correlated theories of credit risks and management, this paper evaluated and analyzed the plan of economical capital measurement provided by the Barthes committee, And compared the existing measurement methods of economic capital, then compared and analyzed in order that we can design the credit methods of risk measurement fitting for the characteristics of China Construction Bank's, to more accurately measure the actual requirements of economic capital, objectively measure the major credit risk the bank facing, and better address the issues of the difficulties for the measurement credit risk in process of the implementation of economic capital management. The will help to quantify their own preferences of the risk, to ensure there is sufficient capital to mitigate the impact of risk, and achieve the maximize benefits to meet the regulatory requirements at the same time.The article started from some literature reviews, first of all, summarized credit risk management in a simple, and then combining the characteristic of China Construction Bank analyzed credit risk management system used by the CCB, focusing on the exist problems. Based on the above issues, the article imported the concept of economic capital. And then the article also did an in-depth analysis and research on the method of economic capital measurement in the management of credit risk, focusing on comparing three measurement methods of economic capital– the coefficient method, the asset's change in law, the revenue's change in law, and concluded: the asset's change in law suits the requirements of currently refined risk management. Finally, because China Construction Bank is also faced with many serious difficulties and challenges during the process of improving the current economic capital measurement, based on a comparative analysis of measurement methods, the article further explored and improved the economic capital measurement methods and put forward specific operational recommendations to the development of the ideas.This article was one of innovation with a new thesis topic, the economic capital theory are the forefront of bank management, and now the research on the economic capital is in its infancy with the exit less research results, and economic capital in the banking sector is also running at the exploratory stage, the method of economic capital measurement in the current four major state-owned banks and joint-stock banks is relatively simple, not very mature yet. Therefore the thesis topics had innovation in both theory and practice; Another innovation was focused on measurement methods and models, and comparing the three measurement methods of the economic capital in credit risk management - the coefficient method, the asset's change in law, the revenue's change in law, and researched the method suited the precise management in the China Construction Bank and on this basis did an analysis of the new ideas of development in further improving the methods.