The Research On The Internal Rating System Of Custom Credit Risk In Bank Of China(Hunan)

With a judgment of the development of international and domestic banks, it is a trend to construct commercial banks’rating systems based on the Internal Ratings-Based Approach (IRB). Commercial banks’internal rating systems can identify, quantify and monitor risks, price risk business, improve transparency in decision-making and lower business decision-making costs. What’s more, they will play an important part in loan loss allowance calculation, capital adequacy management, economic capital distribution, profit analysis and forecast, motivation mechanism and so on. Although the new Basel Capital Accord has provided guidance for the construction of commercial banks’internal rating systems in all countries, these systems are implemented differently in domestic commercial banks. Due to a shortage of basic data, it requires a long and rough process to measure breach probability as well as to quantify risk elements.This paper analyses the method of rating, rating model, the internal rating system theory as well as the research situation at home and abroad to begin, to the Bank of China Hunan branch of the internal rating system as the object of study, focusing on the banks internal credit risk research. According to Bank of China internal rating system development present situation, trend and requirement from the rating method and evaluation content, detailed analysis of the two aspects of the Bank of China Hunan branch of internal credit risk rating system. Based on the current status, trend, and requirements of internal evaluation system of Chinese banking industry, this essay analyzes detailly the Credit risk evaluation of Bank of China Hunan Branch from two aspects, method and content of the evaluation system. Then it introduces the construction of internal evaluation system in Bank of China, under the requirements of new Basel Protocol, based on PD model as the basical corporate banking credit risk model, through the use of practical study, this essay demonstrates achievement of internal evaluation system construction, while figuring out several issues of the present situation. Finally, aiming at the existing problems of enterprise credit and its possible adverse effects, planning the future of Hunan branch of Bank of China of internal rating system overall frame and the next step to implement specific recommendations for two-dimensional rating system, and puts forward how to perfect the system of credit risk quantification, quantification system and evaluation process, the implementation of efficient internal rating system measures, with a view to other internal rating system of commercial banks development and improvement to provide a useful reference.