Evaluation Study On Credit Risk Of Chinese Commercial Banks

Market economy is credit economy. Credit risk plays a vital role in the development of social economy, especially in the financial industry, which has also being the uppermost risk as for the commercial bank in our country. Debt crisis, occurred in the 1980s, made the entire banking industry suffer a great loss. Thereafter, all major banks lay more emphasis on the evaluation and prediction of credit risk. However, Asian financial crisis in 1997 and the US subprime mortgage crisis all reflected the difficulty in avoiding credit risk, with the increasing development of economic globalization and innovation of financial products. It is a key factor for commercial banks to identify,measure and manage credit risk.Therefore, it has been a controversial topic that what method should be employed to evaluate credit risk accurately. Evaluation of credit risk generally uses sophisticated credit risk assessment model in the international community, but due to the late start, the lack of a comprehensive database and risk quantification techniques,it is difficult to directly use modern credit risk assessment model to evaluate credit risk.Then it is of great significance to evaluate credit risk based on the Logistic model in China.This paper attempts to evaluate credit risk by way of Logistic model, on the basis of analyzing credit risk evaluation method. First of all, Logistic model is more suitable for Chinese commercial banks to evaluate credit risk than other models. In addition, this paper delves into two kinds of problems existing in credit risk evaluation of Chinese commercial bank:model building and model application environment. Furthermore, after selecting 100 manufacturing companies randomly as samples, this paper makes am empirical analysis based on Logistic model by adopting factor analysis method to reduce dimensions for primary indicators. Finally, the author makes certain feasible proposals on the problems of credit risk evaluation existing in Chinese commercial banks, based on the conclusion of empirical analysis.Comparative analysis, factor analysis and the combination of Macroscopic and Microscopic methods are employed in this paper. It comes to a conclusion that Logistic model conforms to the characteristics for Chinese commercial banks to evaluate the credit risk, which is high applicable to Chinese commercial banks. Empirical analysis says that Logistic model constructed in this paper for the evaluation of the overall manufacturing enterprise credit risk discriminant accuracy rate is relatively high, reaching 90.00%.End of the article raised some suggestions:for example, the continuous improvement of selected evaluation index in the model, the credit risk early warning by the model results, establish a scientific and effective internal credit risk management system, strengthen supervision and other regulatory authorities. We hope the recommendations could provide commercial banks some guidance to have a reasonable control of credit risk.