Credit Risk Study Of Guarantee Circle In Commercial Bank

In 2007, The Subprime Crisis broke out in the US, and then they got out of hand. In 2008, The financial crisis swept the world, and evolved into the global economic crisis. Facing the complex situation at home and abroad, China’s economy suffered greater downward pressure. According to the national bureau of statistics data released a few days ago, China’s economy grew by 7% in the first half of this year, than last year’s growth rate dropped by 0.4%, and in the first quarter growth is flat, rendered in slow signs of stabilizing. According to the analysis and prediction of all aspects, it can be said that at present our country economy overall downward trend has not been reversed, and the second half of a period in the future may also face more downward pressure. But the economic down turn the negative effect on the real economy will naturally conduction to the financial sector. As is known to all, the main business of traditional commercial Banks is madding loans with higher interest rates, and taking deposits with lower interest rates, the spread between the two is the main source of profits of commercial Banks, so the risk management level of credit assets has become the core elements of commercial bank risk management. Therefore, how to prevent credit risk has become the major issue of commercial banks. What is the Guarantee Circle, in the law, to ensure creditors to achieve a particular creditor, we establish a system which urge the debtor to perform his obligation with the debtor or a third person’s credit or specific property, and we call this system the guarantee.Initially, the guarantee not only becomes the effective means for the enterprise to get bank loans, but also effectively controls the risk of credit assets of commercial banks, but with the complexity of the guarantee relations, the way of guarantee is gradually changing and the guarantee Circle is quietly forming. The formation of the guarantee circle makes the originally unconnected companies to become closely. The risk of an enterprise can spread along the guarantee chain and causes the other enterprise facing loan risk. Since 2013, the regional debt crisis by the form of the guarantee circle has happened in Xinjiang, Fujian, Hebei, Shandong and other places, the regional financial stability is being affected, and the security of bank credit assets is being threatened. Therefore, how to effectively prevent against the risk of the guarantee circle has become the key of the bank credit risk management.Based on the research of the guarantee circle and the commercial bank credit risk, the paper hopes to provide some effective suggestions for the commercial bank to prevent from the guarantee circle risk.Based on the research of the guarantee circle and the commercial bank credit risk management by the domestic and foreign scholars, the paper firstly analyzes the origin of the guarantee circle and the development of guarantee circle in China, and then describes the relationship between the guarantee circle and the credit risk. Whether the guarantee circle will reduce the bank credit risk? Or the guarantee circle will increase the bank credit risk? Then the paper analyzes the credit risk management of commercial banks combining with the characteristics of the guarantee circle, and then analyzes the guarantee circle risk events happened in some areas in detail. Finally the paper puts forward several suggestions for credit risk management of commercial banks, hoping to provide some reference for the commercial bank credit risk management. The main structure of the paper is as follows:The first chapter is the introduction, describing the research background, the significance, the key concept papers, research ideas, contents, methods and innovations as well as inadequate.The second chapter is literature review, respectively reviews the related research between the guarantee circle and commercial bank credit risk management by the domestic and foreign scholars, and finally summaries the researches and points the value of the paper.The third chapter is the theoretical analysis between the guarantee circle and commercial bank credit risk, firstly introduces the origin of the guarantee circle and the history in China, and then analyzes the influence of guarantee circle on commercial bank credit risk, whether the guarantee circle can reduce the risk of commercial bank credit or increase the risk of commercial bank credit?The fourth chapter analyzed the commercial Banks how to guarantee circle, which can identify using exhaustive method to guarantee circle, and use 6 c credit risk measurement to measure the guarantee circle, on the basis of the identification and measure the guarantee risk classifying the degree of risk guarantee circle, and according to different criteria of the guarantee circle, put forward a long-term mechanism to reduce the risk of outbreaks of commercial bank itself and the influence of society.The fifth chapter is case analysis, combining some areas guarantee circle risk events happened on the commercial Banks to improve the level of credit risk management case study, put forward the cause of the risk and how to conduct risk identification, and points out that the risk of commercial Banks how to solve the guarantee circle.The last chapter is the conclusion and policy recommendations. Researching the relationship between the guarantee circle and the commercial bank credit risk management, puts forward some countermeasures and suggestions, so as to provide some reference for the commercial bank credit risk management.