Research On Individual Credit Risk Assessment Of Commercial Bank Based On Principal Component Analysis And BP Neural Network

In financial system, the state-owned commercial bank keeps the key position, and it plays a vital role for the healthy development of the national economy. Commercial bank’s credit risk has become one of the main risks. In fact, the lack of a scientific and effective personal credit evaluation system is become the bottleneck to personal credit market scale’s further growth. Research on the characteristics of personal credit risk, and establish a scientific and reasonable personal credit risk evaluation index system, then introduct a reasonable set of personal credit risk evaluation model. Through the evaluation model the commercial bank can quantitative analysis personal credit risk, in order to improve the accuracy of the individual credit risk assessment and effectiveness. The paper research on personal credit risk of commercial banks, which has theoretical and realistic significance.The paper based on the risk and the credit risk management theory, and summarized the commercial bank credit risk evaluation methods, then analyzed the advantages and disadvantages of the credit risk evaluation methods, finally combined with the actual situation the paper put forward the research idea. The paper unifies the domestic and foreign research on evaluation index system, and combines with the experience of personal credit risk assessment, then accord to the possibility of correct data the paper puts forward a set of personal credit risk evaluation index system. The paper based on principal component analysis and the BP neural network builds a personal credit risk evaluation model. Through the principal component analysis, it could put forward several main ingredients and the maximum keep original index of variable information, then utilized BP neural network to evaluate the personal credit risks. Finally through empirical analysis, the paper verified the feasibility and effectiveness of this method, and put forward the countermeasures of improving commercial Banks’ personal credit risk management level.