Control Of The Economic Restructuring Of Commercial Banks To The Risk Of Personal Financial Services

With the fast growing economics and the flourishing markets, personal banking in commercial banks is more and more important. Personal banking meets the personal financial needs. And the consumer credit, with a swift expanding in scope, is named the cash cow in the commercial banks for years. In our country, for example, mortgage loan is over 90% of consumer credit provided by commercial banks. However, the subprime loan crisis in 2007 was an alarm for the consumer credit risks. In this regard, this paper will focus on commercial banks' behavior in mortgage loan decision-making in transition economies, explaining the risks and make a close study of the risk management.The paper starts with a review of the basic theories upon consumer credit and risk management. From the view of credit relationship and credit rationing, we disclose how credit risk is formed. In the second part, the paper maps the backgrounds of the industry and regulatory as well. The third part, we discuss credit risks faced by commercial banks with internal control, and evaluate risk management in the commercial bank decision-making process. A case study provides some opinion and solution to the consumer credit risk. Based on the discussion, the paper makes policy proposals for further enhancing the risk management.