The Study On Legal Defense In Credit Risk Of China’s Commercial Banks

Commercial bank is the enterprise dealing with currency, a special commodity,whose basic business model is high liability, whose main income is the interest gapbetween deposit and loan and whose existing foundation is credit system. Thefinancial crisis of Southeast Asia of last century and the crisis occurred a few yearsago were led by the credit crisis. So it is very important to manage the credit risks ofcommercial bank and pay much attention to the controlling and reducing credit risksespecially in the surrounding of global economic integration, or else it will influencethe steady of global economy. But, our commercial banks face great challenge withthe expansion of the foreign financial institutions, and the competition is very sharp.All kinds of systematic contradictions is growing, non-performing assets instate-owned commercial bank is rising, financial risk is increasing, all of which haveseriously stunted the smooth running and development of national economy.Nowadays our country carries out a model of divided management, that is, bank,security and insurance run separately, which can avoid risk. Most financial assetsbelong to the commercial bank loads, so the problem of credit risk is extremelyobvious. The key and core to resolve various financial risks is controlling andreducing credit risks effectively. The paper tries to discuss the ways and means oncommercializing local bank and international finance integration from these aspects:credit management status of currently commercial bank, credit risks resource analysis,legal system defects, risks barrier system establishment and so on.Chapter one, the introduction, of the paper introduces the research backgroundand meaning, domestic and foreign research summary and research methods. Chaptertwo studies the performance characteristics and legal defense meaning of commercialbank credit risks in our country, as well as straightening out the category ofcommercial bank credit risks, for credit risks is a collective concept which expressesdiversified feature. At the same time this chapter proposes the meaning for reducingcredit risks with the help of legal means. Chapter three analyzes the legal defects oncurrent commercial bank credit risks guarding mechanism, mainly including legalloopholes of bank loan business supervision, which includes unreasonable institutionarrangement, bad organization and credit monitoring legislation’s lagging behind;separate operation’s legal defects; legal defects of state-owned and joint-stock banks operational structure; defects of legal protection mechanisms, mainly discourse thedefects of “contract law”,“guarantee law”,“general principles of civil law” as well asinterest rates and reserve system. Chapter four proposes a legal solution to guardagainst commercial bank credit risks, firstly strengthen supervision of bank creditassets risks, reinforce supervision of bank industry, continuously improve credit riskssupervision level, establish and improve deposit insurance system and lender of lastresort system, strengthen the cooperation between supervision institutions to adjust tomixed financial operation; then improve operational structure of state-ownedcommercial bank and joint-stock bank; then improve commercial bank credit system,improve approval, credit, internal audit procedures etc; at last, improve legalassurance system, establish and improve credit control and prevention legal system aswell as improve legal environment.