Commercial Bank Credit Risk Internal Control

Since the 90s of 20th century, banking crisis occurred throughout the world set the alarm in China's banking industry and make it urgent for the construction of credit risk internal control system. After reviewing current major banking crisis, we can find that the defects or incompleteness of internal control system are the main causes for the bankruptcy of banks. Consequently, credit risk internal control construction is not only necessary for China's commercial banks, but also urgent.Along with the economic growth and the progress of modern managerial techniques of the 20th century, the context and definition of internal control can be divided into four evolution stages, internal check, internal control, internal control structure and internal control integrated framework. Though internal control in our country is still at its early stage, commercial banks have laid down a relatively comprehensive set of rules and procedures for credit risk internal control. Nevertheless, there are still many things needed to be improved or solved. During the course of long-term business practices, foreign commercial banks have established a pattern of effective credit risk internal control mechanism and methods, which are very important and useful for our country's commercial banks on their way to internationalization and marketrization.Besides following the inner requirements of modern corporation systems, learning the advanced experiences from foreign commercial banks, the construction of the credit risk internal control of our country's commercial banks must be based on our country realities, aim at establishing a multi-level internal control model and enhance the banks'abilities to managing credit risk. The main components include: optimizing the commercial banks'corporation governance; setting up a reasonable top-down authority delegation system; furthering improve the integrated credit limit system;furthering optimize the system of duty segregation between credit review and lending functions; strengthening credit business's IT supporting system;actively establishing a reasonable incentive mechanism; improving the independence and effectiveness of internal audit; trying to speed up the construction of commercial banks'credit culture.