Credit Assets Risk Management Mechanism

Risk management is of great significance to commercial banks, but limited by the planed economy system and the planed economy concepts, Chinese banks have long been ignorant in understanding and researchs of risks and risk management. The research in commercial bank's risks didn't become a hot theme until the financial banks, many scholars and bankers have studied this theme continuously. On March 6rh, 1999 at the second session of the ninth National People's Congress, Prime Minister Zhu Rongji put it clear that prevention and solution of financial risk should be strengthened. With the risks of banks being ever-changing, complicating and ever evolving, it is difficult for people to acquire its rules. Meanwhile, because of the special transfer economy environment, the Chinese banks' risks have quite a few particular traits. Consequently, the mere application of western bank's prescriptive theories and experience can't resolve the puzzle completely. The research in Chinese Commercial banks' risks still has many puzzlers and difficulties both practically and theoretically, and there still exists many unknown realms awaiting further research.Based on the above opinions, this paper focuses on the most serious risks facing Chinese banks, i.e., credit risks. This paper attaches importance to the various reason of the accumulation of credit risks and how to form an efficient credit risks management system. The concept of credit risks management is used in a wider sense and means that how the commercial banks, the central bank and the government employ measures in management and system to reduce the credit risks in the Chinese banks; and this credit risk management won't affect the normal liquidity, profitability and business expansion.