State-owned Commercial Bank Credit Risk Management Practices Study

State-owned banks plays an important role in China's economy.They are not only making great progress in business but also facing enormous credit risks.This paper makes thorough analysis on commercial bank credit risks control both academically and practically. This paper consists four parts.The first part is the overview of the state-owned banks credit business situation.It states the problems and difficulties in credit management to stress the importance to improve the risk management.The second part gives the reasons of the great amount of bad loans.The bad loans are not only caused by the outside factors such as government intervention,macroeconomy policies,state-owned enterprises deficits and social credit vacancy but also inside factors such as unscientific management,imperfect system,improper operations and managerial information asymmetry.The third part is an introduction of western banks credit management systems including operating process,checking and rating system,organizational structure and risk control methods.The fourth part is some measures to improve credit management including financial credit environment construction,risk prevention and disposition,setting up risk supervision system,new risk managerial mehods formulation and personnel quality improvement. After China's entry into WTO,state-owned banks are facing fierce competitions.Profits made from loan business are vital to banks because it's the main income source of commercial banks. Great efforts must be made to improve credit management by the state-owned commercial banks.