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The Empirical Study of Individual Housing Loan Credit Risk

On 15/09/2013, in Finance, by rain

Personal housing loan is a high-quality asset. It is a effective method that adjust the credit quality of the bank. With the rapid development of real estate industry and the rapidly number of individual housing loan, the credit risk exposed gradually. The U.S. subprime mortgage crisis destroyed financial markets. If personal housing loan credit risk accumulated to a certain degree, the outbreak will trigger a domino type chain reaction and finally harm Economic security. Analysis individual housing loan default influence factors and improve the credit risk Management method is helpful for Banks to increase the safety of credit assets.This article makes empirical research on the individual housing loan credit risk according to the individual housing loan data of the commercial bank in Xi’an from 2005 to 2008 based on the summary of the individual housing loan credit risk research results and related theory which made by domestic and foreign scholars. Firstly, this article analyses the affecting factors of individual housing loan default risk and makes the variance analysis on the selected indexes. This article describes the distribution of the breach and each index through the statistical analysis of the sample data. Secondly, this article carries on the forecast of the individual housing loan credit risk with the application of the proximal support vector machine (PSVM) and proves the practicality and applicability in the prediction of individual housing loan credit risk by constructing a test matrix and attribute matrix and the model test. Finally, proximal support vector machine is evaluated and made model analysis and error analysis limitations, and the suggestions for improvement are put forward.This article draws the following conclusion through the analysis on large amounts of real and effective personal housing loan data:The accuracy rate which predicts whether a personal housing loan borrower breaches by proximal support vector machine is 85.6%, high accuracy and the first kind of the error rate is low. Proximal support vector machine is more rapid and accurate in dealing with a large sample problem than logistic model. Through the evaluation and test on model, this article suggests that proximal support vector machine can give forecast on individual housing loan credit risk.

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Research on Banking Internal Rating System Based on New Basel Accord

On 19/08/2012, in Finance, by rain

【Abstract】 Financial risks appear since the occurrence of financial circles. The two go along with each other for several centuries. Since the seventies of the 20th century, integrating with the globalization of international economy and finance, the scale of international capital flow among various countries is becoming larger with a faster speed. The accumulating speed of financial risks is accelerated. Financial crisis breaks out again and again.The banking plays an extremely important role in the development of national economy as the main part of financial circles. It is the primary task for all supervisory authorities to strengthen the risk supervision and maintain the safety and stability of the system. In order to strengthen the international cooperation of bank supervision, the Group of Ten established the Basel Bank Supervisory Committee at the end of 1974. Since the establishment, the committee made a series of principles and agreements, concerning the risk supervision of international banking. The Agreement of Basel is included among them which is far-reaching to the international banking since its publishing in 1988.This text begins from reviewing the historical changes of the Agreement of Basel. It introduces the main content of the New Capital Agreement of Basel and appraisal of each side. Then, it analyses the possible influence to our country and proposes the counter-measure to meet the new agreement. Focusing on credit risks, the main risk which domestic banks are facing, the text recommends two kinds of methods to calculate the weighing assets of credit risks in the new agreement. By comparison, it points out that domestic banks should adopt the internal grading. After recommending the internal grading systems of foreign advanced banks, the paper proposes some suggestions to build the internal grading system of domestic banks.The innovation of this paper lies in this: Facing the influence of the new agreement, viewing from macroscopic and microcosmic aspects, it levelly puts forward the counter-measure from overall to concrete. From bank Management and comprehensive <WP=5>reform of supervision to the setting-up of internal grading, the paper puts forward its suggestions thiningly and progressively. It hopes to be of certain positive meanings for the development of domestic banking, especially state-owned commercial banks.

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Financial Diagnosis and Avoiding the Credit Risks of SMEs

On 16/07/2012, in Finance, by rain

【Abstract】 The credit risks of SMEs (Small and Medium-sized Enterprises) have become a important problem which is focused by the commercial banks and the SMEs. Solving this problem not only can help the commercial banks avoid, control the credit risks and develop stably, but also can help the SMEs obtain the bankroll and grow healthily.Now the measures of avoiding the credit risks emphasize particularly on the Pre-loan Tache and Mid-loan Tache, Post-loan Tache is comparatively weak. Especially in the face of SMEs, these measures gain few effects. Financial diagnosis is adopted in this dissertation to avoid the credit risks of SMEs in Pre-loan Tache, Mid-loan Tache and Post-loan Tache. The aim about the commercial banks effectively avoid, control the credit risks and the SMEs make quiet great progress will come true soon.First, the dissertation analyses the origin and avoiding status about the credit risks of SMEs, and demonstrates the rationality that commercial banks avoid the credit risks by using financial diagnosis from technologic, informational, human aspects.Then, the dissertation adopts financial diagnosis to construct the applicable financial diagnosis system which is composed of financial analysis, financial forecasting and financial crisis alarm. Based on it, the new system of avoiding the credit risks of SMEs is founded, which focuses on Pre-loan Tache and Post-loan Tache.Last, the dissertation expatiates the commercial banks how to avoid the credit risks of SMEs by using financial diagnosis on Pre-loan Tache and Post-loan Tache. On Pre-loan Tache, the commercial banks discriminate and select the eligible SMEs as the credit objects by using financial diagnosis to stop “disease come from mouth”, and discover and foster the potential SMEs to gain the long-term profits. On Post-loan Tache, the commercial banks forecast the SMEs’ financial crisis to take measures to avoid it ahead, and improve the SMEs’ Management to enhance their refund ability and reduce the credit risks.

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Research on the Credit Risk Management Mechanism of the State-owned Commercial Bank

On 10/07/2012, in Finance, by rain

【Abstract】 One of the important problems that any commercial bank is faced with is the risk of credit assets. So how to further study the risk of credit assets becomes an eternal and profound topic.In the early 80s of twentieth century, owing to the influence of debt crisis, international bank line of business began to lay stress on keeping lookout and managing credit risks. In the 90s, several crisis cases which were shocking to global banks and financial institutions (such as the case of Bahrain Bank and the case of Dahe Bank) caused people to pay close attention to market risks. Many principal international banks began to set their systems to measure internal risks and arrange capital. In recent years, realizing that credit risks are still the key financial risk, some great banks, such as the bank of JP Morgan, come to set their eyes on measuring credit risks and try to build internal methods and models to measure credit risks. Since Asia’s financial crisis broke out in 1997, the composite model of market risks and credit risks, the problem on quantitating operational risks and overall pattern of risks Management have drawn people’s more attention.Considering our country’s situation, state-owned commercial banks have referred to others’ experience and taken some measures to strengthen the Management of credit risks so that they could improve the quality of assets. Meanwhile, the government takes the policies of inputting capital and exfoliating bad credit assets. However, the problem lies in that after the government is burdened with the four state-owned commercial banks’ quantities of bad loans, new bad loans still increase at a great proportion, the state-owned commercial banks’ ability of resisting risks is still weak. So after taking part in WTO, these banks are faced with severer situation yet. What are the essential reasons? Based on ten years’ work experience on credit, applying the Basic theories of Economics of money and finance, the writer thoroughly analyzes the reasons that the state-owned commercial banks’ bad loans come into being and points out the disadvantage of present management of credit risks. Applying the principle of dynamically examining and verifying risks, setting the system of managing risks, the writer also frames out commercial banks’ mechanism of managing risks.This thesis can be divided into five parts. At the beginning, it puts forward the concepts of risks, credit risks, risks of credit assets, analyzes the problems and pressure that our country’s commercial banks are faced with from four aspects that objectively exist, further explains that it is actually very significant to improve the management of credit assets. The second part illustrates the foundation that the management theories of credit risks could be founded. According to the characteristics and regularities of credit capital’s movement, it drafts out the methods of managing risks in terms of banks’ rights of controlling credit assets. According to construction states of bad credit assets, based on the characteristics and regularities ofcredit capital’s movement, the third part analyzes the internal and external contributing factors of our country’s bad credit assets. Comparing with our country’s banks’ operating, the fourth part introduces experience of managing risks in Singapore and puts forward the concerned enlightenment. The fifth part points out the overall principles and analyzing models of setting mechanism to manage risks of credit assets. Through founding and improving system of controlling from within and strengthening the ability of recognizing risks, combining qualitative analysis with quantitative analysis, it sets a series of mechanism that can systematically analyze problems with obvious targets and the ability of quick response.

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Analysis on Credit Risks of Agricultural Bank of China

On 08/07/2012, in Finance, by rain

【Abstract】 Agricultural Bank of China (hereafter referred to as “the Bank”) is one of China’s four big state commercial banks. Due to the outside constraints and defects in the internal Management system, the Bank suffered from a great deal of non-performing assets with serious risks. China’s entry into WTO brought it under even more fierce international competitions. Therefore, the issue lying ahead of us is how to effectively prevent and ease off the Bank’s credit risks.This thesis is focusing on analyzing the approach to prevent and ease off the credit risks. Its train of thought is as follows: First, it defines the characters of the Bank’s credit risks, which provides strong support for the further analysis. Through systematically analyzing the causes of the risks, the author then contributes the thesis to identifying and quantifying the Bank’s credit risks under various conditions, and thus offered sound suggestions for improving the identification system of the Bank’s credit risks and the application of VaR Model. Lastly, by sharing the experience of western commercial banks in managing the credit risks, the author puts forward a complete set of advices for the effective control of the Bank’s credit risks.This thesis is innovative in four aspects. Firstly, it is analyzing the causes of the credit risks from three perspectives: outside causes, inside causes and developing angle. Secondly, it offers some well-targeted advices on improving the risks identification system. Thirdly, it empirically demonstrates the VaR Method, which provides reference for quantifying the credit risks and reform of bed debt reserves system. Lastly, the author puts forward comprehensive advices for the effective control of the Bank’s credit risks from four perspectives, which could hopefully be taken as reference for the control of the Bank’s credit risks in the future.

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Research on the Institutional Causes and Controls of Credit Risk in State-owned Commercial Banks

On 02/07/2012, in Finance, by rain

【Abstract】 Market economy is a highly monetized and creditized resource-distributing mode, in which all kinds of risks in economy running will in various ways, eventually, center on and take the form of credit risk, the most fundamental type of risk in a financial system. Under the condition of market economy, the degree of credit risk fundamentally determines whether a financial system is stable and whether it can develop healthily and successively. Therefore, the Management of risks especially credit risks in Chinese state-owned commercial banks must be strengthened, effective Management of credit risks having to be based on a deep understanding of the systematic causes of credit risks.This thesis was to focus on the causes and controls of credit risks in Chinese state-owned commercial banks. Firstly, on the basis of defining the concept of credit risk, I clarified all kinds of forms of credit risks . And then pointed out the characteristics of the credit risks: subject, controllable, spreading, hiding and accelerating. Then I put emphasis on the research into the institutional causes, macro and micro, contributing to the credit risks in Chinese state-owned commercial banks. The macro causes are: the property right, macro Economic policy, legal system and credit environment. The micro causes are made up by two parts, the first part is the problems exist in credit Management and inner controlling mechanism of the commercial banks, the second part is the problem exist in the behavior of the enterprises. The second important part is about the institutional controls of the credit risks in state-owned commercial banks. Firstly, we analyze the institutions which should have being supervising and controlling credit risks in state-owned commercial banks. We have to point out the institution is ineffective at the controlling at the same time. The qualities of loans are falling down while the amount of loans are increasing. The credit risks are accumulating step by step. At the end of this article several methods are provided in credit risk controlling on state-owned commercial bank. To control the credit risks form the bottom, we should complete the ownership innovation on state-ownership. The unique state-ownership should be broken. The financial stock-dominating group should be the forms of our banks. State-owned bank could go on the stock market after innovation. Secondly, commercial banks should perfect the managing organization, and persist on the innovation of ownership, and create the sprit of Enterprise, and develop the culture of inner risks controlling, and change the old-fashioned viewpoints and methods, and strengthen the judging mechanism, and fulfill the inner controlling activity etc. The third is establishing the honesty principal protecting law system and extensive credit file system to improve our credit environment. Innovating the administration of justice is to safeguard the judicial power with fair.

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The Analysis about Credit Risks of the Commercial Bank Personal Housing Loan

On 08/06/2012, in Finance, by rain

【Abstract】 With the further enhancement and improving of the national macro adjustment and control policy, and the shareholding system transformation work of state-run commercial bank one is deepened gradually, the risk question of the personal housing loan becomes one of the focuses that people pay close attention to more and more. The risk and the personal housing loan of the commercial bank are shown as the credit risks mainly. This text has carried on detailed analysis and exposition to this question from such respects as behavior, origin cause of formation, countermeasure of taking precautions against of the credit risks of personal housing loan of the commercial bank, etc., hope to have some inspiration and reference function to the credit risks which take precautions against and dissolve the personal housing loan of commercial bank.The article is divided into five parts altogether:In chapter one some main concepts that are involved while describing are defined at first for put up a concept platform for the following discussion. These concepts include credit risk, and risk of commercial bank and risk of personal housing loan of commercial bank. To commercial bank, the existence of the risk is objective, and general too, as one of the cores of market economy, the credit risks of the commercial bank are shown as the set credit risks more.In chapter two it enumerates the concrete behavior of the credit risks of personal housing loan of commercial bank which mainly includes debtor risk, real estate risk that developer bring, risk of housing price fluctuating, bank manage risk that cause improperly, mortgage assess, assert, risk that handle, the risk that the policy change of the national interest rate brings.In terms of information Economics information asymmetry, go on theory analysis to personal housing loan reason that credit risks produce at first, then analyses the concrete reason which causes the credit risks from six respects: First, Social whole credit consciousness is faint; Second, the omission of the credit system of the personal housing loan; Third, the defects of the developer and development item oneself and market development are imperfect; Fourth, the trade market of the mortgage is unripe, and the mortgage secondary market of the house is not active; Fifth, credit is not perfect in Management inside the bank, and it is imperfect to control degree inside, managerial skillcan not catch up with; Sixth, relevant between perfection and personal credit legal disappearance of system of laws and regulations. While analyzing the reason why the credit risks produce, do not confine to two relevant sides directly of banks and customers, it analyses on society, economy, law heavy background to put credit risks.As the key part of the article, chapter four aims at existing phenomenon and reason, and has put forward the countermeasure of taking precautions against the credit risks. The improvement of the macroscopic environment of Social credit plays an essential role in micro credit environment of the personal housing loan. I put forward the credit consciousness that should be improved the whole society first, set up the laws and regulations correlated with perfection and personal housing loan at the same time, as well as set up personal reference and credit rating system, appraise personal credit scientifically. As taking precautions against the subjects of the credit risks, the commercial bank is sound and standardizing the Management system of the credit risks. It is also very important to set up the risk of the same trade or business and take precautions against the mechanism; Meanwhile, we should perfect the loan guarantee system of personal house, promote the sound development of the secondary market of the home mortgage, share the mechanism, perfect the mechanism of the business insurance in risk of setting up the personal housing loan, for taking precautions against credit risks, reduce loss, bank of assets expect and loss competence will play an important role even.As to the application of the analysis result, two typical cases are enumerated in chapter five, and analyze, which is meant to inspire and help the comrade engaged in concrete work to some extent.

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Study on Internal Rating of Credit Risks of Business Banks

On 02/06/2012, in Finance, by rain

【Abstract】 The paper centers on internal rating of controlling credit risks of business banks. The New Basel Accord emphasizes the application of internal rating of business banks. It is that business banks determine the minimal capital requirement by using internal credit rating system of banks and ensure sufficient capital of banks. It is an approach of special risks of banks. Based on the present situation of the construction of internal rating system of China business ranks, the paper studies on the gap of competition between China business banks and foreign ones. Based on the analysis of the operation theory, necessary data and advantages or shortcomings of two typical internal controlling models of international banking, related to the present situation of China business banks, the paper put forward a model of internal controlling credit risks suited China business banks, which is the center of that. Based on the foundation of the loans composition, historical data of violating treaty, the frequency of violating treaty of calculated loan expectance and real regained proportion of violating treaty, the model calculates the expected and unexpected credit loss of loans or loans composition, differentiates and confirms the loans price of China business banks and improves the controlling credit risks function that has fixed significance. According to the present condition of the development of internal controlling credit risk of international and domestic banking, using the means of theory related to practice, the paper introduces the current internal rating of credit risks of international bank and probes into the difficulty and possibility of internal rating used in China business banks. Besides, the paper presents the relevant applied model of internal rating used in China business banks and put forward countermeasure of the model of internal controlling credit risks. Beside foreword and conclusion, the paper is divided into five parts. Part I: This part introduces the condition of bank credit risks and the characteristics and connotation of internal rating. Part II: This part simply concludes the theory of controlling credit risks of foreign banking and summarizes the situation of practical controlling credit disks of several foreign banks. Part III: This part introduces current VAR of international banking and the typical models of internal controlling credit risks and analyzes these applied thinking and advantages and shortcomings. Part IV: This part the applied urgency of the application of internal rating and the construction of internal controlling credit risks model on the current situation in China by analyzing the problems of internal rating of credit risks of China business banks. Based on the current data foundation of China business banks, a model of internal controlling credit risks is set up by using the model theory of violating treaty. The paper explains the theory of model movement and it’s advantages compared with five grades classification (standardization) of China business banks. This is the key part of the paper. Part V: This part studies on the practice of internal rating of China banks and the current difficult point of the model of internal controlling credit risks. At last, the paper set forth the countermeasures of improving the practice of internal rating of China banking through seven respects.

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Study on Internal Rating of Credit Risks of Business Banks

On 02/06/2012, in Finance, by rain

【Abstract】 The paper centers on internal rating of controlling credit risks of business banks. The New Basel Accord emphasizes the application of internal rating of business banks. It is that business banks determine the minimal capital requirement by using internal credit rating system of banks and ensure sufficient capital of banks. It is an approach of special risks of banks. Based on the present situation of the construction of internal rating system of China business ranks, the paper studies on the gap of competition between China business banks and foreign ones. Based on the analysis of the operation theory, necessary data and advantages or shortcomings of two typical internal controlling models of international banking, related to the present situation of China business banks, the paper put forward a model of internal controlling credit risks suited China business banks, which is the center of that. Based on the foundation of the loans composition, historical data of violating treaty, the frequency of violating treaty of calculated loan expectance and real regained proportion of violating treaty, the model calculates the expected and unexpected credit loss of loans or loans composition, differentiates and confirms the loans price of China business banks and improves the controlling credit risks function that has fixed significance. According to the present condition of the development of internal controlling credit risk of international and domestic banking, using the means of theory related to practice, the paper introduces the current internal rating of credit risks of international bank and probes into the difficulty and possibility of internal rating used in China business banks. Besides, the paper presents the relevant applied model of internal rating used in China business banks and put forward countermeasure of the model of internal controlling credit risks. Beside foreword and conclusion, the paper is divided into five parts. Part I: This part introduces the condition of bank credit risks and the characteristics and connotation of internal rating. Part II: This part simply concludes the theory of controlling credit risks of foreign banking and summarizes the situation of practical controlling credit disks of several foreign banks. Part III: This part introduces current VAR of international banking and the typical models of internal controlling credit risks and analyzes these applied thinking and advantages and shortcomings. Part IV: This part the applied urgency of the application of internal rating and the construction of internal controlling credit risks model on the current situation in China by analyzing the problems of internal rating of credit risks of China business banks. Based on the current data foundation of China business banks, a model of internal controlling credit risks is set up by using the model theory of violating treaty. The paper explains the theory of model movement and it’s advantages compared with five grades classification (standardization) of China business banks. This is the key part of the paper. Part V: This part studies on the practice of internal rating of China banks and the current difficult point of the model of internal controlling credit risks. At last, the paper set forth the countermeasures of improving the practice of internal rating of China banking through seven respects.

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The Research of the Prevention of the Mortgage Loan of Personal House Risks

On 01/06/2012, in Finance, by rain

【Abstract】 The mortgage loan of personal house comes from real estate swift and violent market of development need and the need of getting profits. So, the destiny of the mortgage loan of not merely personal house and destiny of the real estate are of close concern to each other; And personal house mortgage loan is it perfect constantly to need too. Next year, the foreign capitals bank will enter China in an all-round way, financial circles is fiercer in competition . At home, the commercialization of the state-run bank is finished basically, the private bank, trans-regional bank are appearing constantly, the contention of financial transaction will only be crueler and crueler. To the real estate of high-speed development, every large bank uses up all over the skill is fought for. Under great environment such a , settle risk well to be burden weight relation with development level of the business particularly important. Under this kind of background, the strick precaution research of the mortgage loan risk of personal house, particularly urgent, have a realistic meaning very much. So, I have chosen this topic. Hope to pass and study, the source , kind and taking precautions against intact and clear understanding to the mortgage loan risk of personal house; Summarize the working experience of practice, put forward the suggestion of improving to some strict precaution methodsThe thesis is divided into four chapters, namely the meaning of the mortgage loan risk of personal house and research meaning; The origin cause of formation and kind of the mortgage loan risk of personal house are studied; Prevention research and case analysis of the mortgage loan risk of personal house. During that time , explain after enumerating some cases. As regards a lot of research of the full text, the actual working experience too from a lot of people The thesis is started with by the meaning of the risk of the personal housing loan and research meaning. First of all , have made an introduction to meaning of the personal housing loan and course of granting , let readers have a whole impression. Secondly , carry on research to the definition of the risk , propose its essence is this view of ” uncertainty of expectancy result “; Follow , has explained , corrected the views of some books in the past to the meaning of the risk of the loan , think ” grant the loan risk bank unable to regain principal and interest on schedule ” static result qualitative view this. This text think define so , is it reject everything grant risky fact loan to mean, have not seen the relation of the risk and income either. Finally , through the reality of particular interest to bank of real estate at present , expounded the research meaning in which the risk of the personal housing loan takes precautions againstChapter two of the thesis, is the origin cause of formation of analyzing the peculiar risk of mortgage loan of personal house, enumerate the kind of the peculiar risk of mortgage loan of personal house. Have analyse different sources of the risk of real estate, has explained the origin of the risk. In order to study to the mortgage loan risk of personal house further, I pass different categorized ways, have reflected the concrete production link of the mortgage loan risk of personal house and reflected the form,. Chapter three of the thesis, is the prevention about the mortgage loan risk of the personal house. Chapter three introductory song, has explained the whole thinking of prevention of the mortgage loan risk of personal house. Have confirmed that prevents credit risks , false loan risks, operates the risk especially. Has reflected” doing some things and leaving some things undone “, by utilizing the idea of resources high-efficiently. The whole chapter is divided into three. Section one detail the prevention of the credit risks. ; Combine two major factors that the credit risks form: Reverse choice and morals risk, the article has carried on the discussion respectively. Section two because ” false pieces of loan ” serious phenomenon have, operate a kind of i