State-owned Commercial Banks, Credit Risk Analysis And Management

In the process of our national economic reform being deepened, financial industry starts playing an increasingly important role in our national economy. Following the outbreak of international financial crisis, people began to be aware of the risk issue of our state-owned commercial banks that take predominant position in our banking industry. Among a multitude of risk factors, risks related to financing activities have become one of the most important potential financial risk issue. This thesis intends to explore fundamental causes for risks related to financing activities of our state-owned commercial banks and draw relevant proposals to tackle these causes by undertaking thorough investigations into internal and external variables related to financing activities of the banksThis thesis firstly investigate four external variables affecting financing activities, including enterprises, government, central bank and social creditability before proceeding to make an enquiry into internal variables and make proposals to deal with these external and internal variables that cause risks related to financing activities. Concerning the external variables, the thesis make suggestions on constructing a new type of enterprise-bank relationship under the marketing economy framework, co-ordination of the relationship between government and banks, strengthening monitoring functions of the central bank and promoting social creditability system. In order to deal with the banks' internal problems, the thesis recommends to renovate business organization, complete risk management mechanism, develop moral risk prevention mechanism, cultivate corporate culture valuing 'good practice' and construct customer financial risk warning models. The thesis also put forward workable plans to solve bad loans for the state-owned commercial banks and advocates that we need to use multi-methods to eradicate these deep-rooted bad loans due to their complicated nature.