Application Research Of Expected Credit Loss Model In Chinese City Commercial Banks

In July 2014,"International Accounting Standards No.9" was introduced,introducing the expected credit loss model.In order to converge with international financial accounting standards,the Ministry of Finance issued new financial instrument standards in April 2017.In2018,except for financial institutions that compulsorily apply the new impairment model,only two banks in China,Pudong Development Bank and Ping An,actively applied the new impairment model,and other financial institutions were required to apply the new impairment model by 2021.This article takes Nanjing Bank as the research object,applies the expected credit loss model to it,analyzes the impact of applying the new impairment model,provides ideas for Nanjing Bank to apply the expected credit loss model,and also implements new impairments for other financial institutions.The model provides a reference.This article is based on the relevant research on the expected credit loss model at home and abroad,briefly describes and compares the content and application of the old and new impairment models,and sorts out the current status of loans and loan impairment provisions of three types of listed commercial banks in China.After briefly describing the background and asset status of Nanjing Bank,the expected credit loss model is applied by simulation.First,it is divided into three stages according to the different risks of default.Secondly,it points out the main parameters selected by the new impairment model and its determination method,measures the relevant parameters of the expected credit loss model,and substitutes the obtained parameters into the expected credit loss model to measure the loan impairment losses in three stages,and adds up the three stages The amount of the impairment provision accrued is taken as the total loan impairment loss.Finally,analyze the possible impact of applying the expected credit loss model,including the impact of bank performance and financial status,the impact on capital management and risk management,the impact on bank operations,etc.,focusing on the analysis of its bank operations and financial status And the impact of risk management.Through the analysis of the above problems,this article draws the following conclusions.First,China’s commercial banks have generally strengthened their control over risks,and the non-performing loan ratio has declined overall.Second,the expected credit loss model can smooth the impairment losses,prevent risks in advance,and help improve the quality of bankassets.The third is that the expected credit loss model can avoid risks,but the management is given more room for independent judgment and lacks a certain degree of objectivity.In the end,this paper puts forward relevant suggestions on the basis of summary analysis,and provides a reference for banks to better apply the new impairment model.