Commercial Banks To Local Financing Platform For Credit Risk Management Research

With the rapid growth in the amount and scale of regional financing platforms, their loans increase strikingly in recent years; accordingly, the peak of repayment will appear in the year2012and2013. So far, repayment problems have emerged in some platforms with the requirement for extended repayment deadline. Therefore, it is urgent that the commercial banks should take the task of repayment risk management of the regional financing platforms, and it also provides a big challenge concerning how the commercial banks reach such goals. Based on the risk management theory of commercial banks as well as the characteristics of regional financing platforms, the present study aims at a systematic analysis of all the aspects which cause the repayment risks, and problems caused by the repayment. When measuring the credit risk of loans, many of the researchers in China adopt a qualitative approach. The present study, by contrast, employs the more objective CreditMetrics model to provide a quantitative analysis of the loans of regional financing platforms. Based on the empirical study results, the author proposes some countermeasures for commercial banks to deal with the repayment risk in regional financing platforms. Therefore, the present study will provide important practical significance for the role of commercial banks in the credit risk management of regional financing platforms.