Bank Credit Risk Evaluation Model And Its Empirical Study

The credit risk is an important part of bank risk. while the banking system is an important hinge of economic development, the stability of the banking system has self-evident meaning for economic stability and development. This paper reviews some kinds methods and models to measure banking credit risk and empirically study Chinese commercial bank credit risk with Z-score model. On the basis of empirical study, we find that the model can effectively measure the credit risk of commercial banks. After that, we study the bank characters that may affect bank credit risk. We find that scale effect is very significant in Chinese bank industry and bank with higher liquidity has worse credit risk. By our theory and empirical study, we give some advices on how to control bank credit risk in China.