Commercial Bank Credit Management Decision-making Model

Line of Credit management is the fundamental method in bank抯 risk control. The credit risk of banks depends on whether the Line of Credit management decision is right or not, which detennines the survival and stability of the banks. This paper first analyzes the current situation of the Line of Credit management in China, points out the disadvantages of present methods, and then discusses the supporting environment of the Line of Credit decision. In addition, basing on the improvement of current method in Line of Credit management, the paper establishes a optimizing decisive model in assets portfolio of Line of Credit, providing a more comprehensive and scientific method to determine the Line of Credit amount. Thus it makes up the disadvantages of current methods in failing to reflect the Line of Credit amount reasonably. Current Line of Credit management in China focuses on the control of credit amount rather than the degree of risk. This paper correspondingly introduces the theory of risk degree control. Following the two principles of bank-based profit & loss and comprehensive risk-enduring capability, the paper establishes an optimizing decisive model in risk control of single-customer Line of Credit. Thus it provides a way to control and determine the customer抯 use of Line of Credit and makes the relative customer management more sensible. This paper extends an explorative study on comprehensive and sensible methods in Line of Credit decision-making and creates a better way of risk control. It contributes to the enhancement of bank抯 risk management and the higher operation efficiency of banks?credit assets.