Research on Credit Risk Management of China

Risk management is the premise for commercial banks to maintain fluidity, safety and efficiency, is eternal theme for operation and development of commercial banks. Under an increasingly complex international and domestic economic and financial environment, whether effective risks management can be implemented is the important scale to measure core competitive strength of commercial banks. In recent years, no matter upon the macroscopic or the microscopic, China’s commercial banks system has accumulated considerable risk. With the continuous development of the financial globalization, such a kind of risks pressure will continue to increase. Under this background, to parse current status and existing problems of risks management of China’s commercial banks and then put forward the measures to construct and perfect is doubtless very important. Risk and profit are pros and cons of the same coin, they cannot be separated from each other. As one pair of twins, they are closely connected, and then interact. So the higher the yield is, the higher the risks is, on the contrary, the smaller the risk is. In the fierce market competition, what yield the banks with high risk management receive is more obvious compared, which means their relatively rich profit. The risks said by us refer to possibility for occurring potential loss. So only complying with certain conditions, this kind of possible loss just can become actual loss. Process of risks management actually refers to a process of prevention in advance, concurrent control and afterward relief; it is a kind of mechanism established to achieve business goals by commercial banks. Therefore, starting from China’s actual credit environment, meanwhile, borrowing mature experience from banks at both home and abroad, studying and investigating risks identification, assessment and analysis of giving credit, predicting possibility of risks occurrence and then taking measures to control changes upon objective conditions, so as to reduce probability of risks occurrence, which is very important for banking credit business to be developed and innovated.In this paper, the author begins his analysis from the general risks management of commercial bank credit business, for the first, analyzed current status of China’s banking credit risks and the reasons for these problems occurred, and then implemented analysis on process control of China’s commercial bank credit risk and establishment of early-warning system as well as China’s present small and medium-sized enterprises credit business. Based on the above analysis, it finally carried out analysis and instigation upon determining future development direction to credit risks management of commercial banks, establishing and perfecting system and environment for China’s banking credit risks management, and accelerating credit risks management mechanism for commercial banks of China’s economic and financial environment in an appropriate manner.