Control Of Credit Risk Investment Products Commissioned By Commercial Banks

For a long time, the main source of revenues and profits for commercial banks has been deposit and loan spreads. Due to the accelerated marketization of interest rates and the general trend of financial reforms, however, this mode of operation is becoming more and more obsolete, as commercial banks are facing heavy industry competition and operational pressure. Meanwhile, growing corporate demand for direct financing, and the increasingly diversified residential financial needs all combine to call for the creation of commercial banks entrusted debt investment products. As intermediate business products, commercial banks entrusted debt investment products can not only provide funding to customers without taking up credit in loan volume quota, but can also bring considerable non-interest income for commercial banks.Commercial banks entrusted debt investment products are innovative financial products. Although currently commercial banks are witnessing rapid growth in this sector, due to the lack of corresponding operating procedure and inconsistent internal control system and because of the off-balance sheet nature of the product, there has been a general overemphasis on increasing volume rather than risk control. If the financing body runs into problem and cannot repay when the debt reaches maturity, this will lead directly to cashing of the product to the public. In that case, it will bring significant reputation risk to issuing commercial banks and result in massive losses to the banks.In order to maximize credit risk of commercial banks entrusted investment products that may occur during operations carried out pre-control, this study focuses on the major causes of product risk analysis and control means, including credit risk, market risk, liquidity risk, operational risk, legal risk, reputation risk. By studying the credit risk and the control method investment products for the commercial banking commission, it is most desirable to minimize the risks of such products, and provide escort to the operations of these kinds of innovative financial products, so as to provide better financing facilities and facilitate financial services.