Study On The Credit-Risk Of Commercial Banks' Real-Estate

Real estate credit is a relatively professional financial service project with professional and regional characteristics. Since 1990s, the industry of real estate credit has gained long-term development. Commercial banks consider real estate credit as low-risk, high-profit Good Quality Credit. As our country pursues a floating exchange rate regime adjusted by years, the risk accumulation of real estate credit is a long-term one. Once it exceeds the risk limit, severe financial instability will emerge. This paper is an analysis of operation process and credit system of real estate credit in the commercial banks of our country and elaborates on the risk sources of non-performing assets from different perspectives. In China's credit market, there are severe asymmetric problem of information, which needs us to take effective measures to avoid and control problems like adverse selecting or morality risks. This paper is divided into six parts.Part 1. Introduction. This part is an introduction of the study background, purpose, significance and research findings home and abroad in this field.Part 2. Theoretical basis of commercial bank real estate credit. It mainly include theories of adverse selecting, morality risk, right to rent-seeking and credit rating.Part 3. Real estate credit system of commercial banks. On the basis of a clear definition of real estate credit, this part mainly analyze the current situation of real estate credit of China's commercial banks respectively from the perspectives of operation process and management system.Part 4. Current risk situation of real estate credit of commercial banks. This part starts from three basis forms, namely credit risk, market risk and operation risk, and analyze the real estate credit risk of China's commercial banks from the perspective of risk sources. The risk includes credit risk from borrowers (house buyers), risk from pawns (including the risk of property rights of the pawn, price risk of the pawn and disposition risk of the pawn), risk from intermmedieries, risk from developers, internal risk of commercial banks, and external risk from the environment. By summing up the transformation of risk, this part points out the heated issue of false mortgage.Part 5. An analysis of the information asymmetry of the real estate risk of commercial banks. In general, this part is a detailed analysis of the outside environment of the real estate credit market and the inside situation of real estate credit market.Part 6. Counter-measures and suggestions for controlling real estate credit risk of commercial banks. Counter-measures and suggestions are put forward in accordance with the research findings to promote sound development of the real estate credit risk of China's commercial banks.