Improvement Research On D Bank Credit Rating System

Credit risk is the most important risks that a bank faces in its business process. Financialinstitutions must pay much attention to recognize and prevent credit risks in the largest extent.The requirement for security and efficiency about Credit assets is getting higher and higherwith the reform of China’s financial system promotion. The function of Credit rating isgradually important for commercial banks. Therefore, it is important for improving the bank’srisk management level through establishing scientific, rational and objective credit ratingsystem. Taking D bank as research object, the thesis proposes the corresponding improvementprogram on the basis of the analysis of the current situation and existing problems.In this thesis, the study of commercial bank D has carried on the concrete combined withthe related concepts of credit rating and the theoretical interpretation of Basel New CapitalAccord based on domestic and foreign literatures about commercial bank’s credit rating. Byunderstanding and analyzing the status of D bank’s credit rating system, we have found someproblems in the credit rating system and main index system is not perfect, the internal creditrating process is unreasonable, the lack of credit risk measurement science, etc. The problemsare analyzed and specific improvement schemes are formulated. First, the credit rating indexesare improved. Several qualitative indicators and quantitative indicators are selected that basedon the principle of index selection. Second, credit rating processes are changed accordinglyreflected in the establishment of an independent credit rating department and rating trackingand monitoring link and so on. At last, the calculation of expected default frequency combinedwith Z score model, establishment of standardized bank database and the statistical test afterevaluation are adopted for the problems existing in the credit risk measurement. The improvedsystem is actually used at the end of the article to demonstrate its validity and feasibility.Thesis studies that help D bank to reduce the credit risk and make effectivenessincreasingly for the result of a rating system.On the other hand, the other local rating systemof commercial banks have a certain reference in my thesis.