State-owned Commercial Banks, Credit Risk And Its Prevention - Based On The Analysis Of The Regime

With the financial crisis globalization and the background of china's transitional economy transferred from planning economy to market economy in 90's. A lot of non-performing Loans form in state-owned bank system. The rate of bad loan up to 25%, it hit the banking system in china. Some state-owned bank almost has evolved into bankruptcy affec: by the bad loans. At first, the article studies the reason of non-performing loan in one of a state-owned bank. At the same time explain the special behavior of the credit market in china. Second, study the reason that caused the credit risks is broken down into five aspects. Such as, the declining rate of return on assets in state-owned firms has own to the health of china's banking system. Most obviously the state-owned character has major implications for the bad loans. At last, the article describes how to restructure the internal control system to prevent credit risk in the bank.