Credit Risk Measurement Models And Their Applicability Analysis

The credit risk is the main risk for the financial organization, especially for banks and financial securities. Strengthening the management of the credit risk is always the key point of the financial industry and its supervising organizations'work. Recently, with the development of the financial globalization and the fluctuation of the international finance market, the credit risk becomes more and more serious and all countries'banks and investors face an unprecedented credit risk. The credit risk has been one of the most important risks in the financial market, which mainly exhibits in the sharp scale expending of global debt, the situation on the edge of danger faced by commercial banks as the main credit entity and the huge uncertainty caused by the rapid expansion of financial derivatives'trade. Further more, with the continuous increasing of new debt-issuers and emerging of new financial products, the whole-society'credit risk has been increased.While analyzing and measuring the credit risk becomes more and more urgent, the credit risk management becomes more and more important. Owing to some academic and practical questions in the credit task itself such as the asymmetry of the credit risk distribution and the data deficiency, the accurate measurement and management of the credit risk is the most challenging problem in the area of risk management which has various ideas and needs further developing. The paper introduces the basic contents of risk and credit risk, and then mainly focuses on different measuring methods of the credit risk:traditional measuring methods of the credit risk, modern measuring methods of the credit risk. Each method is explained in the following aspects:root, development, main idea, processes, advantages and disadvantages. The purpose of the research in my dissertation is to find out a suitable credit risk measurement model for our country's present situation and improve the credit risk management level of our banks by analyzing and comparing modern credit card risk management modelsBecause of limited capacity, some chapters'analysis is merely experimental and exploring. The study result needs verifying by practice and further revising.