Study Of The Development Of Consumer Credit Problems

It is without doubt from the background of macroeconomics and the mechanism of microeconomics that consumption credit come into being and develop. On the mechanism of microeconomics, consumption credit result from the game's perfect Bayesian equilibrium between the bank of maximizing its profits and the consumer of maximizing his/her utility under the condition of modem market economics, and from the transitional economy transferred from selling market to purchasing market on the background of macroeconomics. Developing consumption credit is the managing demand policy for economic growth through stimulating consumption demand then aggregate domestic demand. It has been becoming one of the most important demand policy for the economic growth of China that increase the inhabitant's income, and the inhabitant's final consuming rate in GDP by developing consumer loans so as to promoting the industry structure and the consumption structure on the basis of the analysis of the demand structure of the economic growth in China.The result of the analysis of the model in this article shows, the commercial banks of China would face the dilemma hi the design of restrictive covenants of consumption credit after the period of the rapid increase of consumer loans under the condition of the restrictive interest rate of consumer loans. That is, the commercial banks of China couldn't put forward classified covenants according to the risk type of the borrowers, and so that they supply the same type of restrictive covenants and claim the high-level collateral net worth in the covenants.Personal credit institution results in lowering the transaction cost of consumer credit, and provides the commercial banks for developing consumer credit with the institution condition for assessing the borrowers, exerting credit monitor and controlling the risk of the consumer credit through the sharing mechanism of the personal credit information and the punishing mechanism of it to the defaulter. The developing of the consumer credit is also under the restriction of the inhabitant income allocation institution, the scarcity of collateral institution and the unavailable legal system of personal credit in China.Breakup of the institution restriction of consumer credit is to promote the development of consumer credit of China through enforcing the risk management of consumer credit. Therefore it becomes the institutional environment in which to push to develop the consumer credit of China to found and improve the personal credit institution, especially the institutional background on which the China's commercialbanks manage the risk of consumer loans to found the improved legal system of personal credit. In addition, it is the effective measure for promoting the development of consumption credit of China to transfer and dispel the risk of consumer credit by insurance and security, to construct collateral institution supported by the government, to exert market-oriented interest rate reform of consumer loans step by step, to claim the additional penalty interest rate for ahead-payment and to apply the scientific technology for managing the risk of the consumer credit.J.P.Morgan's CreditMetrics, or VaR can be applied to making management strategies for being before-, in- and after-credit. This scientific approach makes the bankers the masters of the risk of consumer credit, and then provides the bankers for management strategy in operation on consumer credit with the precise risk-standard or the precise risk-horizon.