China’s Real Estate Companies Empirical Studies Of Credit Risk Management—Bank Of Credit Risk Measurement

The real estate industry in China is compared to cancer patients for there existmany problems, China has dealt with it with chemotherapy step by step, althoughthere is no potent medicine, A full range of diagnosis,treatment and control have beengiven, Since2009more intensive efforts to control has been made to cure this chronicproblem. In the treatment of Chronic problem in real estate, control of bank loans isundoubtedly a good medicine, so China has also introduced a number of policies andregulations on bank loans, accordingly in this process how to effectively managecredit risk in China’s real estate banking industry becomes a major concern for thebanking industry. The first and most important step of Credit risk management iscredit risk measurement.This paper, based on existing research at home and abroad,evaluates credit risk of the listed real estate companies by using the revised KMVmodel and discuss the reasonable control of distance to default by using clusteranalysis of the real estate industry, according to these empirical results, the China’scredit risk management recommendations is stated and it is expected to early apply toour measurement of credit risk management models used in practice.In this paper, firstly, the theory of credit risk and its measurement models areintroduced, a detailed analysis of the modern credit risk measurement models is made,and a comparative analysis of the advantages and disadvantages of four kinds ofmodern credit risk measurement model are made. These show the KMV model in ourcountry has a strong applicability; Then based on the revised KMV model, the paperconduct an empirical analysis on China’s listed real estate companies, the results showthat the KMV model can be timely and effective identification of credit risk profile oflisted companies; Finally the paper discuss the reasonable control of distance to default in real estate industry by using cluster analysis so that banks in the creditprocess can timely identify the real estate company’s credit risk profile, and respond toto avoid real estate firm in default losses to commercial banks, which is also theeconomic significance of this study located.On the basis of in-depth analysis of constraints and difficulties existing in thecurrent use of credit risk measurement model in China’s commercial banks, The paperconduct s in-depth thinking on how to build a standardized, effective and viablesystem of credit risk models and, and states the corresponding correction method,according to this empirical results, also confirms that the revised KMV model isapplicable to our study, on the basis of analysis of the default range of reasonablecontrol, which is this paper’s two innovation.