Credit Risk Of Commercial Banks In China's Internal Control Study

As a special corporation working on currency, commercial banks were born with the attribute of loan risk. In order to control the loan risk as strictly as possible, banks in every country, ever since their birthday, were kept seeking ways and methods of all kinds. Those economic crises occurred in 90's 20^th centuries lead to universal concern about bank risks all over the world. Since this century, financial globalization has greatly improved the efficiency in world financial market, however, it makes international capital movement losing contract with economic reality, which brings greater risk to the world, say, economic unbalance and unsteadiness. Therefore, every countries in the world pay more attention to bank risk guard.As for commercial bank in China, loan is a main asset business, which makes 2/3 of the total income. But, for many reasons, banks in our country face terrible loan risk, some events due to bank loan risk, exposed here and there, which have badly hurt bank safety, local economy, politics and society. After these pains, we are thinking about how to make them up, how to strengthen internal control as a whole, for example, to change pro-makeup into pre-defence or so as to build up "a wall against fire". That's an urgent problem to be solved.Documents prove that many experts abroad have been researching actively on the problem of financial globalization and loan risk. On the contrary in China, similar research is quite weak, especially on specific analysis and treatment in this area. Having worked on bank loan management for many years, I have been greatly interested in this subject and accumulated a lot experiences and ideas. Recently, the study on MBA, help me with further research on it while improving my academic level and knowledge. I believe it will play a direct role to my future business. Moreover, I'm sure the fruits of my research will be very helpful for the real need of Chinese commercial bank to improve ability, against bank loan risk. Real analysis and treatments emphasized in my thesis could be a good reference for commercial banks in risk preventing as well as government decision making.First of all, my thesis sets up a theme and talks about the background and the reason of choosing it. Although financial globalization has amazingly improved the efficiency of world financial market, the mobilization of global capital also arouses impact in some countries and area which leads to financial turbulence or crisis. I notice that the process to finance globalization makes the financial risks in our country protruded. Whether protruded or not, the loan risk problem in China have already become crucial to our economic health. This proves that the research on this theme is of great importance and of urgent meaning.Secondly, after deep study and research on combing a large quantity of documents, I acquire a general idea about internal, control theory and bank loan risk theory. So I draw brief conclusion on this aspect, which lays a foundation or premise for further exploration.Besides, I probe the history and reasons of bank loan risk and internal control system from economic developing process. Further or more, I dig out the problems existing and reasons related, which become a foundation for future treatment analysis.Thirdly, based on my bank internal control analysis, I analysis systematically bank internal control against loan risk. I believe a good bank internal control lies on an intact system. So I analysis from such aspects and their as main factors for construct a system, sub-systems activities, internal and external environment of the system, problems appearing nowadays about bank internal control system and their causes, and the way to perfect the structure of the system.Lastly, I deduct a conclusion from the above research and give some practical suggestions as well. The following is my main summary:a. The problem on bank loan risk is of long history.b. To strengthen internal control is an effective method for prevention from loan risk.c. It would be very helpful for building up and perfecting internal control system of Chinese bank, if we refer the fruits of research on this theory all over the worlds.d. The bank internal system is both complete and independent. So we need think about many aspects to try to build up an internal control system for Chinese commercial banks' loan management.e. The basic structure of the system includes three parts: longtitudinal control system, cross control system and opposite feedback system.f. Some practical measures suggested to build up a "human based" internal control system.I also support some treatment about the realistic effort direction of department related.My research focus on the internal control system of bank loan risk while some methods of the theory of system is introduced. You might not say it's creative enough, but it's really rare. I trust that my realistic ideas and suggestions about bank internal control system feasible. However, because of my limited knowledge, there might be some sentences unappropriate in my thesis. I truly hope to be taught since it could be my motive force of further research.