Discussion On The Business Of Commercial Bank Credit Risk And Risk Management

Risks that commercial banks encountered can be divided into credit risk, market risk, liquidity risk, and operational risk, et al. In all risk management technologies, the market risk management technology is becoming, more and more mature. However, the study on the credit risk management technology has fallen behind the former during a long time. Banks and investors in the world were challenged by the credit risk first-ever after a lot of savings and depository institutions in developed countries going down in 1980s, and cases occurred since 1990s including the crisis of financial institutions such as Baring Bank and Daiwa Bank and big losses of Long-Term Capital Management. A Research of World Bank on global banking crisis shows that the main reason of bankruptcy is credit risk. Since then, international banking and academia are deeply aware of the importance of study on the credit risk management technology of bank. With the change of financial market environment, innovation of merchant banking, diversification of markets participants and transaction, and development of credit derivatives, the concept and intention of credit risk are widened and strengthened. The study on the credit risk management technology of bank has become one of the most challenging works in the financial field.Business of modern commercial banks can be divided into personal banking and corporation banking as customer types. Profits of modern commercial banks in China still mainly come from corporation banking, so it is very important to keep watching on the credit risk of corporation banking.In this paper, based on abundant literature and documents, the concept of credit and credit risk is firstly given, then the status of credit risk at home and abroad is introduced. After that, the formation of credit risk of corporation banking in CQ Bank is stated. At last some personal comments on credit risk of commercial bank management in China are presented.On the basis of summarizing of writings and document literature in the world, operative and pertinent measures are innovatively set forth according to modern services principles of marketing, management principles of commercial banks, the reality of CQ Bank and credit risk of government financial platform in CQ Bank. These measures are helpful to control credit risk for CQ bank in theory and reality, and helpful for other commercial banks at home to expand their corporation banking and effectively control credit risks.Knowledge of credit risks theory is applied on the practice of banking to analyze of current problems, set forth countermeasures and give suggestion on specific business of CQ Bank who is in the changing stage of business strategy. So it is meaningful in practice, and helpful for other banks in customer marketing and risk controlling.