From what aspects should we consider regional risks when handling loans?

Regional risks should be considered from the external environment and internal environment when handling loans. One is the regional risk caused by external factors of banks, and the other is the regional risk caused by internal factors of banks.

External environment:

The level of regional economic development, the level of economic development in a region determines the fundamentals of the financial ecological environment in this region. The level of regional financial development directly determines the operating environment of commercial banks and affects the scale, quality and structure of banking business development.

The level of local government debt affects local financial stability and the security of bank credit funds. The level of regional social credit greatly affects the asset quality and economic benefits of commercial banks' credit business.

Internal environment:

The quality of regional credit assets is a direct reflection of regional credit risks and the most important indicator to measure internal risks. The spread and profitability of credit assets are important guarantees to resist risks. The better the profitability of credit assets in the target area, the stronger the ability to resist regional risks. Liquidity risk is the risk that banks need to focus on.

The prevention of regional financial risks can be carried out by perfecting regional risk monitoring, deepening financial reform and innovation, strictly ensuring credit quality and strengthening cooperation among financial institutions in the region.

Regional financial risks are often caused by the diffusion and diffusion of financial risks of individual or local institutions in the region, or the diffusion and diffusion of financial risks in other regions closely related to regional economy, which leads to the occurrence of related financial risks.