Research On Credit Risk Management Of Commercial Banks In China

As an important part of Chinese financial institutions,commercial banks are vulnerable due to their high risk and high leverage.If there are any negligences in risk management,it is considerably possible to bring huge losses to the bank,and it will have a serious impact on the entire financial system.Credit business,as the most basic part of the daily business of banks,is the main source of commercial banks to make profit in China.Pre-loan risk management is the first line of defense in bank credit risk management.Scientific and effective management methods can control the credit risk of commercial banks at a low level from the source,thus it builds a stable foundation for safe development of Chinese commercial banks.The article describes that commercial banks improve the credit risk management level by optimizing the pre-loan survey of the bank pre-loan management.It studies the credit risk management and pre-loan management through summarizing and sorting out the literature and basic theories in the foregoing part of article.Based on the current situation of credit risk management of Chinese commercial Banks,this paper analyzes the causes of problems in the current situation from before,during and after the loan.It takes Y Company,a marketing enterprises successfully borrow the money from NB Bank,as an example to optimize and upgrade the original analysis method in the perspective of NB Bank.The KMV model is used to predict the expected default probability by inputting daily stock information,and compared with the traditional analysis method to verify the possible of loan.It proposes the following suggestions to improve credit risk management:(1)Pay attention to the trends of the lender's industry in time;(2)Accurately realize the leader's financial situation;(3)Implement internal rating based approach in the internal of bank;(4)Use KMV model to measure the expected default probability of marketing enterprises.At last,the article summarizes the improvement of credit risk management and especially the pre-loan investigation of Chinese commercial banks.