Basel Accord Ⅲ: The Study To Commercial Banks In China

Finance is the core of modern economy, and plays an increasingly important rolein the market economy, and Commercial bank which is an important part of thefinance is an important channel for the government to regulate the economy. With thedeepening of the process of economic and financial globalization, China’s commercialbank is facing both opportunities and challenges in the international arena. Especiallythe introduction of the Basel Accord Ⅲ has brought a revolution to the Internationalcommercial bank which has to face greater difficulties. Analysis from the perspectiveof China’s commercial bank, China’s commercial bank has a distinct advantagecompared to other countries in the short term, Because of the regulation in China ishigher than other countries, so China’s commercial bank should seizes thisopportunity to strengthen its influence in the international arena. But from a long-termanalysis, China’s commercial bank will also faces many difficulties, such as reform ofbusiness model, regulation of credit risk, prevention of liquidity risk. Onlysuccessfully deal with these problems, China’s commercial bank in order to beats hisopponents.The object of this paper is China’s16listed commercial banks, and the focus ofthe study is listed on the credit risk of commercial bank. First, this article summarizesa variety of domestic and international research of Credit Risk Measurement, focusingon the development process of various metrics model. In the second chapter, thearticle analyzes the impact of Basel Accord Ⅲ on International Commercial Bankinternational commercial bank and the impact of China’s commercial bank from"Basel Accord Ⅲ". The third part analyzes the credit risk profile of the China’scommercial banks, and introduces several important credit risk models, especiallyKMV model. In the fourth part, the article amends KMV model. The amendmentsfocus on the coefficient of Long-term liabilities. By inspection of different m values,the article finds the optimum value of m is0.3. On this basis, the paper estimates thedistance to default of listed commercial banks, and find that the possibility of defaultof China’s listed commercial banks is very high. The last part of the paper is policyrecommendations, according to the paper’s analysis, article has targeted the few policyrecommendations, such as controlling local financing platform credit risk, improvingcredit risk management system, enhance profitability, improving capital reserves, strengthen liquidity regulation. I hope this essay can have a certain role in promotingthe implementation of the Basel Accord Ⅲ as well as the development of China’scommercial bank.