Research On The Impact Of Executive Corruption On The Credit Risk Of Commercial Banks

Since the reform and opening up,China has attached great importance to the development of financial work and financial security,and the financial industry has become an important tool for macroeconomic development and social resource allocation.Commercial banks play a leading role in the whole financial system and are an important impetus for the modernization drive.As the direct decision-makers of the operation and management of commercial banks,the executives' behaviors will have a huge impact on the development of banks and even the financial stability.With the frequent occurrence of bank executive corruption,several scholars have found that executive corruption is directly related to the non-performing loans of banks.A bank is one of the joint-stock banks in China.This paper takes a bank with a typical executive corruption case as an example to study,which is not only conducive to analyzing the impact of executive corruption on the credit risk of commercial banks,but also can get warning significance from a bank and provide reference for the development of other banks' credit business.The credit risk of a seemingly well-managed bank broke out after a series of corruption cases.This paper uses principal-agent,information asymmetry,rent-seeking theory,depreciation effect and reputation theory to analyze the influence mechanism of bank executive corruption on the stage of credit risk prevention,assumption and resolution.The analysis points out that executive corruption in the risk prevention stage will increase the information transmission is not smooth and principal-agent conflict,increase the difficulty of risk identification and control,weaken the risk prevention,may lead to credit risk;In the risk-taking stage,the behavior of rent-setting and rentseeking will increase,which will increase the cost that is difficult for the bank to estimate,reduce the income of the bank,increase the risk-taking and may cause credit risks.In the risk resolution stage,the depreciation effect and bad reputation will be increased,the disposal efficiency of non-performing loans will be reduced,the difficulty of the disposal of non-performing loans will be increased,the risk resolution will be impeded,which may cause credit risks.This paper also combined with the performance of a bank case analysis,further enrich and verify the impact of bank executive corruption on credit risk,to provide theoretical guidance for China's commercial banks credit risk management work,for China's financial regulators to prevent executive corruption to provide an important reference.The executive corruption of commercial banks can not only increase the occurrence of bank credit risk,but also threaten the financial environment and social stability.Therefore,how to prevent the impact of executive corruption on the credit risk of commercial banks is of great significance to the whole financial industry.In the end,the paper puts forward some suggestions based on the impact of executive corruption on credit risk,including: at the macro level,strengthen the anti-corruption efforts in the financial sector,improve the legal system to prevent financial corruption;In the medium level,strengthen industry self-discipline,increase supervision;At the micro level,the internal control mechanism of banks should be improved,the credit risk management system of banks should be optimized,and the incentive and restraint mechanism of senior executives should be improved.