Economic Capital Of The Bnak Based On Credit Risk Management

Among various kinds of risks faced by commercial banks, credit risk ranks the first. The proposal and application of economic capital links capitals with risks, promoting the integration of the risk management of commercial banks and the capital regulation, emphasizing the function of the capitals as a buffer to reduce risks, finally attracting more and more attention as an important tool of managing risks and generating profits for the banks. In the aspect of credit risk measurement, the Basel New Capital Accord, when managing risks, innovatively provides a suite of capital measurement methods which is based on the inner credit rating. However, for most of the commercial banks in China, it is not possible to measure risks and capitals by using the new capital accord, either because of the inferior institution and corporate management structure, or because of the backward technologies and methods.This paper study deeply in the basis of risk management theory in and abroad, Credit risk measurement model and Economic capital measurement methods, and according to the Internal ratings-based approach of economic capital which raised by Basel New Capital Accord, this paper construction internal coefficient to meet the practice of Agricultural Bank of China; Then take a branch of China Agricultural Bank of China as example, Carried out its credit economic capital, According to measurement results, Analysis the role of implementation of economic capital management system in prevention and control of credit risk; though combined analysis, Proposed credit risk management Prevention and Control System program which is based on the concept of economic capital, in order to provide a useful advise about the branch's future task of controlling credit risk; at last, describe how to improve Economic capital measurement methods and how to further strengthen the management of economic capital for credit risk prevention and control.