Research On Real Estate Loan Risk Management Of China's Commercial Banks

In recent years, as the progresses on China's housing system reform and the sustained rapid growth, China's real estate industry has shown rapid development momentum, and becomes a new growth point and consumption hot spots in national economy. Real estate industry is capital-intensive industry, its development is inseparable from financial support, Though the financing channels of China's real estate industry show a wide range of development trends, such as bank loans, issuing shares, issuing bonds, the financing pattern, formed dominantly by bank loan, is still single. And commercial bank loans are the main credit choice of real estate developers and private housing. Real estate loans is development booster of real estate market, it has made tremendous contributions for the prosperity of the real estate market. However, there are many problems in China's real estate loans, especially Its lending model and structure are irrational, it has made real-estate loan assets of commercial banks faced with considerable security challenges, and its risks are relatively high. At present the domestic real estate market has gathered a huge risk, commercial banks and real estate finance also have been hidden significant potential risks, which are taken essentially by commercial banks. To establish a systematic, scientific, and complete real estate loan risk assessment and prevention system is capable to accurate assessment of commercial bank assets timely, and it is very important for the stable operation and healthy development of commercial banks. Therefore, the commercial banks, government departments and banking supervision department should combine together in order to reduce the risk of real estate loans from commercial banks. It will be practically significant for the development of commercial banks, the entire financial sector development, the sound development of the real estate industry as well as the stable development of our society.This article describes the asymmetric information theory, the hypothesis of instability of financial institutions and asset price volatility and risk-related theories, and also describes their advantages and disadvantages of the three theories. This paper starts on the development of the real estate industry, summaries on the relationship between the financial industry and the real estate industry and its characteristics, then introduces the status of real estate loans from China's commercial banks, as well as the main risks of real estate loans from commercial banks and their characteristics. This paper choose and analysis of influencing factors of the risk of commercial bank real estate loans from different angles, then selects a reasonable and scientific commercial bank real estate loans risk assessment indicator, uses Analytical Hierarchy Process (AHP) to determine the weight of each index, then build a scientific, rational and completely risk assessment index system. By drawing on the successful experiences of the United States, Hong Kong, Sweden and Thailand on risk prevention, this paper put forward measures and suggestions on commercial bank real estate loans risk prevention from the commercial bank itself as well as external aspects.