Internal Management Of State-owned Commercial Bank Credit Risk Prevention

The state—owned commercial banks that are the main body of china's banking industry imply importantinfluence and effect to China national economy and society life．But for a long time,the large bad—loans ofthe state-owned commercial banks are the primary problem,which has restricted the banks performanceand development．Especially,after with China is about to join WTO,The state-owned commercial bankswill be faced with great challenge．If the high—ratio bad loans aren't been solved,the existence of the banksreatened. On base of the author long time practice of credit work in the state-owned commercialbanks,the article is written for researching for the bad loans problem ofthe banks and it gives concreteadvice and measure to solve the problem．The author also wishes that the article can do help to the banksand its credit officials． The article first describes the situation of the state—owned commercial banks lorris performance andindicates that large bad loans are the main problem of the banks in credit performance．With the externalenvironment improvement that the state—owned commercial banks face,the credit management problemhas become the primary inconsistency．So,it should set about the inside management to solve problem oflarge bad loans of the banks．With researching for the inner reasons ofthe problem,the author thinks that three risks exist inthe banks；they are organization risk,ability risk and morality risk．The article defines thethree risks andanalysesthem． The prevention and cure to the three management risks is chief part of this article．The authorexpatiates the methods from six aspects．First,the state—owned commercial banks need to optimize its creditorganization setup．One credit organization frame with three departments and two commi~ees may beconsidered by the state—owned commercial banks．Secondly,the state—owned commercial banks mustperfect its credit regulations．The systenl of the banks credit regulations consists of the fundamentalregulation that is the core of the system,special loans regulations,regulation of persons indeed andpunishment regulation．The article describes these regulations particular．Thirdly,the state—ownedcommercial banks needs to strengthen human resource development and management．A credit groupwhich members are uncorrupted,duteous and efficient is essential guarantee for the banks credit operation．The author gives his opinion in five hands forthe banks how to do betterthe work．Fourthly,the specialists'consultation regulation in loans decision—making need be set up．The regulation can help the banks to makecorrect decision on some complicated loans．Also．the specialists'consultation regulation is one ofmethodsto keep away the ability risk．The article gives its advice on how to set up the regulation．Fifthly,intemalcontrol against credit management risks needs to be strengthened advised by the article．The three creditmanagement risks are lastly found and deal with by internal control depamnent．In order to strengtheninternal contr01．the author advises the banks to set up credit risks management department as main body tocontrol the risks．The article also recommends the principals and methods of credit internal contr01．At last,the state-owned commercial banks are advised to develop affirmative credit culture by the author．Thecredit culture is the common value conception．faith and attitude about credit．which may exea importantinfluence to loans decision-making and credit risks management．The article makes some suggestion aboutdeveloping credit culture from five aspects．The author indicates that the active credit culture is the SOUl toprevent the credit management risks and the ideal bourn of the banks credit performance．...