The Research On Real Estate Credit Risk Of Commercial Banks In China

Compared with western developed countries,the real estate market in China developed with late start.The land and housing policy began to loosen after the opening and reform policy.With the rapid growth of our national economy,the real estate industry also developed fast,which pushed national economy as well.At the same time,the development of capital market also boosted the real estate industry,giving great support to the whole capital chain.However,the capital chain of the real estate industry is closely bound up with commercial banks.The risks of real estate industry will be directly transmitted to commercial banks,which will have a huge impact on China's overall national economy.In recent years,the price of real estate is still rising and the relationship between real estate and commercial banks is more and more close.But credit default happened frequently,and the real estate credit risk is gradually showing up.Thus,it is of great theoretical and practical significance to study the risk sources,risk measurement and risk management of real estate credit risk for the maintenance of China's financial stability.This paper studies the factors and methods of the real estate credit risk from two angles.In the theoretical research,the second chapter defines the financing channels of real estate industry,the concept and development of real estate credit,the risks and characteristics of real estate credit and current problems of risk management,paving the way for the following research.The third chapter demonstrates the risk factors and the measuring methods of the real estate credit risk.Risk factors include housing bubble,high dependence on credit,poor liquidity,vulnerability to policy regulation,subjectivity of risk assessment and business cycle volatility.By comparing the traditional and modern risk measurement methods,I get the conclusion that the CPV model is used to select the independent variables and set the model.The fourth chapter makes the empirical research by using OLS method and CPV model.On the basis of the third chapter,12 variables are selected.Through testing,credit default rate is in negative correlation with the price of real estate & the deposit reserve rate,and in positive correlation with the 1 to 3 year loan interest rate & the exchange rate.Further analysis demonstrates that real estate credit risk is affected by housing price,negatively related to macro economy,and monetary policy can regulate credit risk.The result of stress test shows that under serious deterioration,the loss will be several times more than current status,which is a warning to commercial banks and the authority concerned.On the basis of theoretical research and empirical research,together with lessons from foreign commercial banks' management experience,the paper puts forward management suggestions from two angles.The first is that government should stabilize housing prices and the credit risk by using macroeconomic policy tools,establish a credit evaluation system and provide a variety of land and housing supply to control real estate speculation;The second is that commercial banks should strengthen the management before and after the loan,make good use of risk measurement tools and provide diversified financing channels.