Discussion On The Credit Risk Of Commercial Banks In China

Until nowadays, the core business of Chinese commercial banks is still the credit operation. As the growth of the credit business, more and more attention is paid on its risk. It is critical for the management performance of Chinese commercial banks to recognize, keep away and control the credit risks and as the consequence, which is at the centre of the banks'management and operation. There are two sources of credit risks:one is the borrower's performance incapability, the other is the borrower unwilling to performance. From the view of the development history of international banks, the management of commercial banks' credit risks goes through three stages:specialist judgments, credit scoring and default probability model, and each has its good and bad side, which is the subject of this article.Credit risk has been studied in the theory for over twenty years. While there have been many methods supplied in the theoretical level, it is still the most important risk Chinese commercial banks face with and they have bore great loss from it. The situation of credit risks faced by Chinese commercial banks is very severe for the following four reasons. First, the governance structure of Chinese commercial banks is not perfect. Second, the building of inner control system is lagging behind. Third, the whole credit situation is not good enough. Last, the human resource of credit risk controlling is scarce. So, it is significant to discuss Chinese commercial banks'credit risks from the above aspects.This article begins from the concept of credit risk, introduces and evaluates the current research of the management of credit risk in the international banks. The main conclusion is that we cannot simply copy the method of credit risk management of international banks. This article describes the situation and main forms of the credit risk and analyzes the reasons of the credit risk Chinese commercial banks faced with. The author has participated management of credit business and non-performing asset and so is familiar with the running and operation procedures of Chinese commercial banks. Under the current situation of sociality, law, economic and credit, combining the author's working practice and the practice of advanced ways of credit risk management and some specific cases, this article supplies some suggestion from the following aspects:institutional building of credit risk management, implementation of the "three consulting" institution, fully investigation, accountability of credit giver and human resource management.The method used in this article is mainly theoretical analysis, combining necessary mathematics and graphs. The article includes six parts. First is the introduction, discussing the background and subject of this article. Second, the author introduces the concept and characteristics of credit risk. The development of the methods of credit risk management of the international banks is also reviewed. Third, through the description of the data of Chinese commercial banks'non-performance assets, the author describe the situation of credit risk. Fourth, the author analyzes the main forms of credit risk Chinese commercial banks faced with from the classification of single corporate client, group corporation client and consumer client. Fifth, the author analyzes the reasons of the high rate of credit risk of Chinese commercial banks. Last, from the problems of Chinese commercial banks'credit risk management and combining the practice of the banks'development, the author gives some suggestion to improve the credit risk management.