The types of credit risks can be generally divided into two categories: market risks and non-market risks. Market risks mainly come from the production and sales risks of the enterprise (borrower) (that is, the risks caused by changes in market conditions and production technology and other factors during the production and sales process of the borrower's goods; non-market risks mainly refer to natural and social risks). Risk. Natural risk refers to the risk that the borrower will suffer economic losses and be unable to repay the credit principal and interest due to natural factors; social risk refers to the risk of commercial bank credit caused by the behavior of individuals or groups in society.
The prevention is mainly about the prevention of bad credit. There is a famous saying in the credit manual of the Industrial and Commercial Bank of China: "No matter how high the interest we charge, it is difficult to make up for the loss of credit principal!" China fully implemented the five-level credit classification system in 2002. The system divides bank credit assets into five categories according to the degree of credit risk: normal, special mention, substandard, doubtful, and loss. Bad credit mainly refers to substandard, doubtful, and loss credit. Bank credit risk refers to various uncertainties. Affected by various factors, in the operation and management process of the bank, the actual income results deviate from the expected income targets, and there is the possibility of asset losses. Credit risk refers to the failure of the borrowing enterprise to repay the credit principal and interest on time due to various reasons. The possibility of capital loss. Credit business accounts for a large proportion of bank credit business. Credit has the characteristics of high risks and outstanding returns, and is of great significance to the operation of the entire bank. Therefore, it is of great significance to study credit risks in general. Credit risk has the following characteristics:
(1) Objectivity
As long as there are credit activities, credit risk does not depend on human will but exists objectively. To be precise, there is no Risky credit activities simply do not exist in actual banking work.
(2) Concealment
The uncertainty of credit itself is likely to be a source of loss due to the characteristics of credit. Covered by appearances.
(3) Diffusion.
The loss of bank funds caused by the occurrence of credit risks not only affects the survival and development of the bank itself, but also causes related chains.
(4) Controllability
Refers to the bank’s ability to identify and predict risks beforehand, prevent them during the event, and resolve them afterwards
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The main risks and countermeasures of commercial bank credit
1. Operational risk
1) The concept of operational risk: The fulfillment of market entry commitments has made China’s financial market more open to the outside world. With the improvement of local commercial banks, local commercial banks are facing more fierce competition, which puts forward higher requirements for the risk management of commercial banks. However, due to the lack of property rights of local commercial banks, lack of internal control mechanisms, improper process design and other factors, operational risks have become increasingly prominent. .
According to the definition given by the Basel Committee in paragraph 1 of the Agreement, operational risk refers to the risk of losses caused by imperfect or problematic internal procedures, personnel and systems, or external events.
Operational risk can be divided into two categories based on risk causes. One is the risk of operational failure or error, including personnel risks, process risks and technical risks, etc. The other is the operational strategy risk, which refers to the risk of Risks of losses due to inappropriate strategies adopted when external events or external environments, such as politics, taxation, regulation, government, society, market competition, etc., occur. The former is mainly related to internal control efficiency or management quality, also known as internal risk; the latter is mainly related to external events, also known as external events or external dependency risks.
2) Operational risk management countermeasures and suggestions
According to the new agreement, there are three main methods for solving operational risks: basic indicators, standard methods and internal model methods. The core is based on different Risk weight allocation of capital. However, for Chinese commercial banks, due to the difficulty in collecting data on personal housing credit operational risks and the short time of business development, it is basically impossible to use statistical methods and information simulation. The unpredictability of operational risks is particularly prominent in China, so a more realistic approach The focus of preventing operational risks is to focus on the following four aspects:
1. Strengthen process management
1. Check and sort out existing processes to eliminate possible loopholes. Although all commercial banks in China have regulatory departments and risk management departments, they do not have specific operational risk management departments, let alone operational risk management departments for personal housing credit. There are many loopholes in the loan contract and loan process. If not corrected early, it will seriously affect the development of the business.
2 Conduct careful analysis and market research on newly developed products to avoid blind investment, ineffective investment and high-risk investment. Product updates in the personal housing credit business are gradually accelerating. In order to seize market share, various banks have made a lot of innovations in many aspects such as repayment methods, guarantee methods, and handling methods. However, whether these innovations have undergone sufficient market research and strict operational risk review , questionable. It is understood that Chinese commercial banks rarely conduct precise data analysis and predictions before launching a new personal housing credit product. They tend to rely on experience and subjective judgments of leaders. This is both because the database has not yet been established and because Chinese commercial banks Not paying enough attention to market research. Establishment and improvement of emergency measures. The loopholes and risks detected should be avoided and corrected through reasonable means, and excessive haste and overbearing clauses should be avoided as much as possible.
Chinese commercial banks have not done enough in this regard, especially in dealing with early repayment. After understanding the possible losses caused by early repayment, the bank adopted measures to immediately increase liquidated damages and limit early repayment, because in There was no corresponding provision in the loan contract, which caused a strong response from the society.
Second Standards: Strictly formulate business manuals
There should be a detailed management manual for personal housing credit operators. Some commercial banks have similar management methods, operating specifications and implementation rules, but they are far from enough. A comprehensive business manual is a necessary condition for grassroots personnel to carry out standardized operations. In many cases, operational risks arise from operators' unfamiliarity with the business. Such an operation manual must be as detailed as possible, with reasonable explanations and handling of every specific situation that may occur. The formulation of the manual should pay special attention to the design and handling of operational risk-prone links.
The establishment, management and maintenance of three databases
Some commercial banks have attached great importance to the establishment, management and maintenance of databases and have begun to establish their own personal housing credit databases. It should be pointed out that Chinese commercial banks have not yet realized the good role a good database can play in promoting business development and the guiding role it can play in preventing operational risks. The database of personal housing credit is not just a database of personal information, it should also include data on early repayment, default risk, operational risk and other aspects. Without this comprehensive data information, it is impossible to comprehensively analyze and understand the risks faced by individuals and housing credit through mathematical models, and it is impossible to formulate ultimately effective policies. A good operational risk prevention method for counterfeit mortgages, which is currently very harmful, is to establish a database to prevent fake mortgages, collect a large number of cases for statistical analysis, and extract highly relevant factors to facilitate the prevention of fake mortgages in specific operations. Unfortunately, although Chinese commercial banks have encountered a large number of fake mortgages, a similar database has never been established. Until now, the only way to prevent the risk of fake mortgages is through loan officers' static statements and reports to developers. Empirical judgment of the project situation.
Fourth: Strengthen personnel management and optimize risk management position settings
The operators of personal housing credit business are obviously different from the credit personnel of corporate business. They are responsible for the investigation of projects. , review and approval, and is also responsible for the investigation, review, approval and procedures for individual borrowers, or may be responsible for only one of the two. Therefore, the management of operating personnel is the most important and difficult part in preventing operational risks. Empirical data shows that once internal bank employees are involved, operational risks will bring huge economic losses. Without excellent talent allocation and scientific incentive mechanism, no matter how perfect the management framework is, it will not be able to operate. From the perspective of market development requirements, the development of commercial banks is a process of constantly seeking a balance between risks and opportunities. Therefore, a "risk manager system" should be established within the risk management system. Its functions should be determined to be efficiency-centered, with risk control and prevention as its responsibility, and to control risks at a lower level during credit review, inspection and bad credit management. .
2. Guarantee risk
1) Guarantee risk
Credit guarantee is only a necessary condition for the granting of credit but not a sufficient condition for the granting of credit. Commercial banks also have a misunderstanding about credit guarantees, that is, they attach too much importance to the role of credit guarantees and believe that as long as there is a credit guarantee, they can extend credit. Credit guarantee only disperses credit risks and provides a compensation function, but it cannot change the borrower's credit status, nor can it guarantee full repayment of credit, so it cannot fundamentally eliminate credit risks. There is a lack of standards for judging the qualifications of collateral assessment agencies and identifying the accuracy of assessment conclusions. There are no clear requirements for whether the bank or the borrower should hire the appraisal agency, what qualifications the appraisal agency has, how to assess the credit status of the appraisal agency, and how to determine whether the appraisal conclusion of the appraisal agency is accurate. The actual situation is that the appraisal agency is basically hired by the borrower to pay the appraisal fee. The hired appraisal agency often considers the borrower's requirements and overestimates the value of the collateral. The bank will approve it as soon as it sees the appraisal report of the appraisal agency, resulting in most cases. The value of the collateral is overvalued. When the bank disposes of the collateral, either the collateral is valuable and unmarketable, or the liquidation value is significantly lower than the book value. In addition, there is no standard for judging the liquidity of collateral. As a result, it is impossible to judge in actual work whether the collateral is accepted by the market and to what extent.
2) Guarantee risk management countermeasures and suggestions
1) Banks must improve the guarantor guarantee system, strengthen the risk review of guarantors, and conduct in-depth analysis of their solvency: First, from Starting from a single guarantor, assess the guarantor's guarantee ability, whether its financial situation can bear the amount of external guarantees, and whether the total amount of external guarantees and its tangible net assets are within a reasonable proportion; second, from the perspective of risk control, the mutual guarantee The guarantor is regarded as a group of borrowers, and their credit concentration is reviewed to prevent excessive concentration of risks due to insufficient guarantees; third, the guarantee limit of credit-granting enterprises is set, and the credit access of enterprises with excess quotas is strictly restricted. Strengthen the analysis of the guarantor’s financial strength. When analyzing the guarantor's financial strength, we must first analyze and master information about the guarantor's financial status, cash flow, credit rating and contingent liabilities.
Secondly, it is necessary to judge whether the guarantor has the ability to perform its obligations through the analysis of this information. The key points of the analysis are: first, the contingent liabilities of the guarantor, especially the quantity and amount provided by the guarantor; second, the total amount of guarantee provided to the outside world and the guarantor Whether the tangible net assets are within a reasonable proportion.
2) Strengthen the analysis of collateral and pledges. Collaterals and pledges must be evaluated in accordance with the Mark to Market principle. For collateral, the realizability and future liquidation value of the collateral must be considered; for stocks, shares and charging rights, the impact of company conditions and market changes must be considered, as well as the future price changes of stocks, schools, highways, etc. Uncertainty about road toll rights to effectively protect bank claims.
3) The bank should investigate the qualifications and reputation of the appraisal agency and appraisers, including: whether there is a financial or other interest relationship between the appraisal agency and the borrower; the relationship between; whether the evaluation method used by the evaluation agency is suitable for the evaluation project, whether the previous evaluation conclusions of the evaluation agency are consistent with the actual situation, etc.
4) Regulate credit guarantee institutions. First, guarantee companies must be managed as credit customers, and their guarantee lines must be determined through unified credit granting. At the same time, when granting credit, explore and establish a credit evaluation and credit granting system that is consistent with the actual operation and management of guarantee companies. The second is to carefully examine whether the guarantee limit disclosed by the guarantee company is comprehensive, whether the guarantee limit exceeds a certain multiple of the guarantee company's registered capital, and whether the risk compensation mechanism is sound. The third is to pay attention to preventing risks arising from borrowers and guarantee companies jointly defrauding banks, and to examine whether the counter-guarantee measures set by guarantee institutions are complete. For the evaluation report of the guaranteed enterprise issued by the guarantee agency, the bank also needs to send people to investigate the borrowing enterprise. 1) The concept of moral hazard
Moral hazard is that after the principal and the agent sign a contract, due to information asymmetry during the performance process, the party with the information advantage may take inappropriate measures to maximize its own interests. Actions that benefit others, infringe upon the interests of others, and thereby cause losses to others. In the operation and management process of commercial banks, there are multi-level and multi-faceted principal-agent relationships. Therefore, moral hazard caused by information asymmetry inevitably arises and objectively exists in the operation process of commercial banks. The main source of profits for Chinese commercial banks is still credit business, and the issue of moral hazard in credit business has also become the focus of research on risk prevention of commercial banks.
2) The levels and manifestations of moral hazard in the credit process of China’s state-owned commercial banks
According to the management system and operating procedures of commercial banks’ credit business, moral hazard mainly exists in the following three levels, and are specifically expressed as:
Moral hazard at the decision-making level of commercial bank credit business: The decision-making level of commercial bank credit is mainly the leaders and credit approval personnel of all levels of banks. Under the property rights system of China's commercial banks, most individuals who make credit decisions do not have property rights commensurate with their powers. In fact, they do not have sufficient financial capacity to be responsible for the decision-making results, or they only have negligible responsibilities. Moreover, in China's commercial banks, Under the internal management mechanism, the responsibilities and rights of decision-makers for the risks and benefits created by credit are also unequal. This is the fundamental reason for the existence of moral hazard at the decision-making level, which is specifically reflected in the non-marketization of decision-making behavior and the impact on senior management. softening of restraints, slow response to violations, etc.
Moral hazard in the management of commercial banks: The management of commercial banks mainly refers to the credit business managers of management banks at all levels. The moral hazard at the decision-making level increases the moral hazard at the management level. For example, when opinions are expressed not based on reality but to "cater to one's will", the interest goals are short-term, and when the decision-making level's binding force on the management is softened, different forms of Operating outside of authority, reacting indifferently or even acquiescing to violations by subordinates, operating off the books, manipulating accounting statements, artificially adjusting statistical data, reporting good news but not bad news, etc.
Moral hazard at the management level of commercial banks: The management level of commercial banks refers to the personnel who directly handle the credit business. They are the collectors of information and are the level with the richest amount of micro-information. Because they obtain the largest amount of micro-information, when management supervision is not in place, they become the level where moral hazard occurs most frequently within commercial banks. For example, staff take advantage of system loopholes, highly qualified personnel use computers to commit crimes, credit and non-performing asset managers delete unfavorable information or provide false information to mislead management, etc.
3) Preventive measures for moral hazard behaviors in the credit business of Chinese commercial banks
Since the causes of moral hazard problems in the credit business of Chinese commercial banks are complex and have many influencing factors, , To effectively prevent moral hazards, comprehensive prevention must be carried out internally and externally, systems and people, and all levels that generate moral hazards.
First of all, establish a modern enterprise system with clear property rights, clear rights and responsibilities, separation of government and enterprises, and scientific management. It should be said that domestic commercial banks have made great progress in establishing a modern enterprise system and improving the corporate governance structure. However, as the main body of China's commercial banks, state-owned commercial banks still have not completely got rid of the situation where government and enterprises are not separated. The shareholders of small and medium-sized joint-stock commercial banks Its role is still limited. Problems such as unclear property rights and insider control are difficult to effectively solve. Shareholders' meetings and the internal supervision system of commercial banks are still unable to effectively restrict decision-making and senior management.
It is necessary to truly establish a management system in which the decision-makers of commercial banks are responsible for the bank's operating results with their own rights and interests, and the operators directly bear the economic responsibility for operating failures. Only then can the moral hazard control in the credit business of commercial banks achieve satisfactory results. .
Secondly, further improve the internal control system of commercial banks and transform the risk management method of decentralized management of China's commercial banking departments into process management and system management. According to the daily operation and management behavior of commercial banks, risk control is divided into risk control of business processes and risk control of management processes to conduct separate research and design. It is necessary to strengthen planning, organization, coordination and control within each department under the established organizational structure, and effectively control risks in various management tasks and work processes, so as to give full play to the role of the internal control system in preventing moral risks.
Third, establishing an adequate information disclosure system and strengthening external supervision can effectively reduce the internal moral risks of commercial banks. Give full play to the role of the China Banking Regulatory Commission and the Banking Association, such as establishing an information database for financial practitioners, fully disclosing information on personnel who are not suitable for senior management positions in commercial banks, and improving the ability of commercial banks to obtain human resources information; requiring commercial banks to improve their response to violations Transparency in penalties for responsible business personnel, etc. At the same time, it is also necessary to clarify the responsibilities of regulatory authorities and establish an accountability system to ensure timely and effective external supervision. This encourages commercial banks to not only conduct qualification reviews by banking regulatory authorities when appointing senior managers, but also consciously strengthen the prudence in personnel appointments from the perspective of their own risk control, and reduce the moral hazard of management in the credit process of commercial banks.
Fourth, use legal constraints to increase the punishment for credit officers who engage in moral hazard behavior.
The establishment of a strict and rigid legal system plays an important role in preventing moral hazard among bank loan officers. For example, according to Article 9 of Hong Kong’s Prevention of Bribery Ordinance (Chapter 201 of the Laws of Hong Kong), bank credit business It is illegal for a person to accept anything of value from a customer for himself or his relatives, such as money, gifts, positions, services, preferential treatment and other benefits, and thereby give preferential treatment in credit business. The maximum penalty is 7 years in prison and a fine of Hong Kong dollars. 500,000, and will also be subject to a ban of up to 7 years from holding a managerial position in any corporation or public institution or from practicing in any profession. Through severe penalties, it plays a huge deterrent role in maintaining financial order, curbs the greed of credit business personnel, prevents credit business personnel from breaking the law, and prevents moral hazard behaviors in credit business.
Fifth, create a corporate culture of integrity and establish a team of honest and efficient credit personnel.
Corporate culture is the core model and belief that determines the operation of a company. A sound ethical culture is the basis for decision-making by employees at all levels in handling daily affairs. If credit operations personnel at all levels can voluntarily maintain high ethical standards, banks will not need to worry about illegal activities. Strengthen the integrity management of credit personnel by establishing a corporate culture of integrity. It is necessary to constantly pay attention to the behavior of credit officers at all levels and detect problems early; it is necessary to contact customers through different people to prevent them from corroding credit officers; it is necessary to report various frauds through internal complaint mechanisms; it is necessary to target the specific situations of employees , Arrange careful training plans, such as frequent case analysis and case-based preventive education, to make credit practitioners aware of risks, deepen their understanding of laws, regulatory regulations, and ethical standards, and improve their alertness to ethical dilemmas. and skills in dealing with related issues.