The Credit Risk Control Of City Commercial Bank From Soft Information Perspective

Medium, small and micro enterprises occupy a important position in China’s current economic development. however, the financing difficulty has become a bottleneck restricting the development of these enterprises, the root of the problem is the moral hazard and adverse selection caused by the information asymmetry between banks and enterprises. That is to say:when the bank lends money to small, miniature enterprises will face a higher level of credit risk. So, how to deal with this kind of risk has become a major problem that city commercial Banks are facing.The most prevalent method of preventing and controlling of credit risk is evaluating customer credit risk in advance, Credit rating is one of the important means of credit risk assessment, credit rating can be quantified by dealing with the credit risk of the enterprise, provide the basis for commercial banks to assess the risk of commercial banks, to reduce the transaction cost, so as to achieve the purpose of controlling of enterprise credit risk effectively.Credit rating method including the common factor analysis method, artificial intelligence model, KMV model and so on, but these methods are used for model is not easy to meet the conditions and scope of application is limited and can not be in the credit risk in the Commercial Bank of city spread widely. In addition, these evaluation methods make the commercial bank can only bear low level risks, unable to adapt to the medium, small and micro enterprises.After15years’exploration and Practice, Bank of Lanzhou has gradually formed a set of risk prevention system of enterprise credit with soft information. This method has been applied and played a substantial effect on Business Circle Loans. In this paper, a point is proved from the point of signal transmitted model that soft information can be considered to a signal which can distinguish credit levels; city commercial banks can use this signal to achieve the purpose of preventing the credit risk. Combined with the Bank of Lanzhou East Market District loan case, proving that city commercial banks prevent credit risk by using soft information is in line with its own characteristics, and conducive to the long-term development of itself. Finally, put forward suggestions to the control of credit risk with soft information for improvement.This paper is divided into five parts:the first part is an introduction. The second part gives an brief definition of soft information concept, the connotation of the credit risks, and the relationship of soft information and commercial bank credit risk prevention. The third part is about the impotency of city commercial bank using soft information to guard against credit risk analysis. The fourth part analyzes a specific case of the use of soft information in the credit risk control. In the fifth part, summarizes the four parts before and recommendations for improvement. The sixth part is a conclusion.