The Study Of Agricultural Bank Of China Shandong Branch Credit Risk Limitation Management

Bank manages the risk. One of the most important tasks for the bank is managing and assuming the risk. In April2010Agricultural Bank of China announced to implement the new Capital Accord which is adopted by the Board, the main line of the first comprehensive risk management system planning, which marks that the Agricultural Bank of China has taken to strengthen the comprehensive risk management.The program made by the ABC will be a comprehensive risk management framework,which arrangements for the overall goal of the next three years, to implement the new Basel Capital protocol as the main line.The establishment of a comprehensive risk management system meet the needs of modern commercial banks. Credit risk management, as an important part of a comprehensive risk management,is a useful tool to address the bank’s capital contradiction between the limited capital and unlimited development of banks, and it is the core of allocation of resources and improvement of bank’s portfolio income. Credit risk limit management is the most important means of credit risk management, represents the maximum risk limits that can be tolerated by the bank in the credit business.It is a management model based on risk measurement, the embodiment of bank’s business strategy, policy-oriented and capital configuration. It is the requirement of the external regulatory,even also the development direction of sophisticated credit risk management, a comprehensive reflection of the bank’s business strategy, policy guidance, as well as the allocation of capital, on behalf of the direction of credit risk management, professional, meticulous and systematic. This paper argues that ABC Bank Shandong Branch of the credit risk management capabilities gradually increased with the technological advancements.The credit risk limit management is not running in place because authorization management, credit risk measurement, credit risk management culture is relatively backward in the organizational structure, then it concluded that ABC Bank Shandong branch should build the credit risk limit management system and train the advanced credit risk management culture.This paper has the following innovations:First of all, the bank should establish the bank credit risk limit management system through the ABC Bank Risk Measurement and Management Model, for all customers credit management institutions, to take gross credit risk limitation management of customers industries and areas; secondly, the bank should control the credit behavior of every branches through credit risk economic capital management knowledge, achieving the purpose of earnings risk coverage; at last, to further optimize the existing credit calculation formula and consider the actual needs of customers.