The Research On The Internal Rating Banking Management Of A Bank Sichuan Branch Credit Risk

In the background of the New Basel Capital Accord implementing in the Chinese banking, this paper makes a systematic study of the IRB in New Basel Capital Accord. The New Basel Capital Accord explicitly encouraged the conditional banks to use IRB to measure risks and to strengthen risk management. But there are many weak links in the theory and practical operation of internal rating Banking Management. This paper tries to combine the actual situation in our country, make a systematic study in the IRB, and give suggestions to implement IRB of commercial banks. This paper focus on the following aspects:(1) This paper systematically reviews the evolution of the New Basel Capital Accord, analyzeing new risk management requirements and purpose of the international banking industry more comprehensively, and presents a new challenge for China’s commercial banks. Then, the author briefly summed up the establishment of the system IRB governance structure of internal rating system, designed and built an effective internal rating system to implement the verification of IRB data, IT systems and internal rating system. Also, the author summed up the basic situation of China to build a two-dimensional rating system that contains the borrower rating and debt ratings in order to enhance database construction and build IT system construction, interior design and other aspects of the organizational structure of rating building. Besides, the author summarizes some features, such as the improvement of risk management level in domestic commercial banks which benefit from the IRB, quantitative and qualitative indicators at all levels from the macro to the micro, differences in credit risk scale and probability of default values estimated by each bank.(2) The second part focuses on the internal rating embodiment of A Bank in Sichuan Province. Through its IRB case analysis, the author details IRB motivation, progress, operational implementation and use of advance. First, the author explains the rating methodology currently used in A bank of Sichuan Province; Second, the author describes the current situation in A bank rating system, and takes Sichuan Guo dong Construction Co., Ltd. Customer as a case to describe internal rating model in the application of A bank in Sichuan Province. By analyzing the basic situation, competitive advantage and financial situation of Sichuan Guo dong Construction Co., Ltd.,, the author concludes internal rating model for determining a customer’s ability to obtain loans. Finally, both from the application of safeguards and core, the author discusses the role of the IRB in the economic capital measurement, risk performance appraisal, credit approval management, quota management, risk warning, loan loss reserves, loan pricing and other aspects of the extraction management.Credit rating system in our country is at the initial stage, lacking risk prevention experience. Combined with unfavorable external environment, relevant laws and regulations are not sound. So China’s commercial bank customer credit rating system faces enormous challenges. This paper is based on the practice operations starting rating of A Bank in Sichuan Province, which completely shows the internal rating system, and makes recommendations for improvement in Sichuan IRB applications, which exist in the data model of regional differences, such as the limitations of the process of independence. The author provides some references for domestic commercial banks to continue to strengthen the application of IRB and deep credit risk management, which complies with the requirements of the regulatory supervision of the Agricultural Bank of internal rating models, and provides the demonstration and theoretical basis for the effectiveness in regulatory.