Credit risk control methods

Credit business is the core business of commercial banks, traditional business, credit risk is the main risk faced by commercial banks around the world. Next, please enjoy the credit risk control methods that I have collected and organized for you on the Internet.

Credit risk control methods

Big data risk control is mainly three parts: credit big data mining, credit big data processing, big data risk control application.

Credit big data mining:

Big data Internet massive big data in the data related to risk control.

E-commerce big data for risk control, all the information is summarized, the value will be entered into the network behavior scoring model, credit rating; credit card type of website big data is also very valuable to the risk control of Internet finance. The year of application for credit card, whether it is passed, credit limit, card type; credit card repayment amount, attention to preferential information, etc. can be used as reference data for credit rating; the use of social network relationship data and mutual trust between friends to aggregate popularity. Borrowers are divided into a number of credit ratings, but do not have to publish their credit history; plus Taobao type of water, electricity and coal payment information, credit card repayment information, payment and transaction information, has become a data omnipotent player; small loan type of website accumulated credit big data including credit limits, default records, etc.; third-party payment type of platform to pay the direction of the payment, the amount of money paid each month, the brand of the products purchased can be used as an important reference data for credit rating; the third-party payment type of platform payment, monthly payment, purchase of product brands. The credit rating of the important reference data; life services website big data such as water, electricity, gas, cable TV, telephone, network fees, property fee payment platform is objective and real reflect the basic information of the individual, is an important type of data in the credit rating.

Credit big data processing:

Preparation stage: business understanding, data understanding, data preparation;

Data raw materials: personal basic information, bank account information, bank flow data, wind control related Internet big data;

Data factory: based on different wind control models, data mining in processing;

Data products: Credit rating, credit report, identity verification, fraud monitoring.

Big data risk control applications:

Access to fresh big data data sources and automated decision scorecards, quantitative risk control decisions, docking large e-commerce platforms, access to vertical credit scenarios under the innovative financial products. At present, the domestic Shenzhourong big data risk control platform, integrated with comprehensive credit data, in big data risk control and scene docking to do better.

Countermeasures against credit risk

First, revise and improve the credit management system to ensure the coordination, cooperation and constraints between the various systems, to ensure the implementation of the credit management system. First, improve the credit file management from the system. As soon as possible to formulate and implement the "credit file management implementation measures", on the collection of credit files, handover, inspection of the express provisions, assigned to specialists responsible for, and regular inspection, assessment of the implementation of the situation. On the issue of false enterprise financial information, we can consider the establishment of "four consistent audit" and "financial statement audit liability compensation system". Specifically, that is: on the one hand, the bank itself on the borrowing enterprise's general ledger, ledger, original documents and important physical verification, to achieve the "four consistent"; on the other hand, can sign a contract with the CPA firm, commissioned by the firm of the bank loan applicant's financial statements for audit, and issued an audit report as a basis for the bank's approval of the loan, and at the same time, in the contract, such as the report of the inaccurate and cause the The contract also stipulates that if the loan is lost due to inaccuracy of the report, the CPA and his firm will be responsible for compensating the bank in full for the loss suffered as a result.

Secondly, further improve the risk control system centered on loan risk management, such as authorization to grant credit, separation of auditing and lending, hierarchical approval, collective approval, and "three checks" on loans. Including: in the handling of credit business in strict accordance with the business process, job authority and the exercise of authority to operate under the conditions of the strengthening of different positions, the role of mutual supervision and constraints between departments, the implementation of the whole process of risk control of the business to prevent the occurrence of a variety of irregularities; the development of pre-credit investigations, loan review and post-credit checks and implementation of the rules and regulations, the provisions of the content should be included, the way of investigation, verification methods, etc., to avoid formalities, to avoid the implementation of the rules. and so on, in order to avoid formalities. At the same time, the establishment of a sound job responsibility system, credit management responsibility to each department, each post and each person, strict assessment, to prevent the phenomenon of non-compliance with the law.

Second, the establishment of a sound credit special management institutions, to prevent the excessive concentration of credit power, the implementation of credit decision-making democratization and scientification. First of all, we should really implement the system of loan separation, as soon as possible, the review and approval of loans were implemented to different functional departments, clear review of the loan department's scope of work, job duties and work objectives, standardize the loan approval department's work system, the approval of the content of the approval, the approval of the authority to approve the approval process and approval of the responsibility.

Secondly, for large loans and difficult loans, a special loan management committee should be set up, specifically responsible for loan approval decision-making. The committee can be a non-permanent organization, but it should be composed of administrative leaders and business experts, who are responsible for providing basic information on loan applicants, loan risk analysis reports and expert opinions, and implementing democratic decision-making for loan approval.

Third, the loan risk assessment is specifically implemented to a functional department independent of the credit business department. Regular assessment of loan risk is a specific task to monitor the degree of loan risk, which requires an independent, scientific and objective quantitative assessment of the risk situation in the life cycle of each loan, and loans that reach a certain level of risk will require the relevant departments to take effective measures to resolve and transfer the risk. Therefore, in order to ensure the objectivity, scientificity and timeliness of the loan risk assessment, this work needs to be independently accomplished by a department other than the credit business department. The establishment of a specialized credit management agency is intended to prevent the excessive concentration of credit power and to establish a "firewall" in the distribution of credit power by making use of the relative independence of the agency. However, in order to ensure the mobility of information, to ensure that all departments can fully occupy, **** enjoy the collection of borrower credit information, should also establish a system of information flow in the relevant departments to prevent the occurrence of the situation, the public **** information is privately occupied by a department.

Third, the establishment of a borrower credit information *** enjoyment system. The above two measures are intended to solve the problem of credit management of individual branches of commercial banks, but since the business field of individual branches is limited to a certain region, it is impossible to have a comprehensive grasp of the creditworthiness of existing borrowers, especially future borrowers. Therefore, commercial banks should also set up a borrower credit information system within their systems, so that all their credit business departments can have a comprehensive picture of the creditworthiness of borrowers, the operation of the local economy, the operation of the national economy, and the macro- or micro-economic policies of the central and local governments. The borrower credit system can collect information on borrowers who do not repay their debts, are unable to repay their debts as they fall due, or whose businesses are in poor operating condition and whose loan risks are too high, and prohibit its branches from granting new loans to non-performing borrowers by exchanging "non-performing borrower blacklists" within the system and taking effective measures to recover old loans in a timely manner.

Credit risk management principles and connotations

(1) Risk management as far as possible to move forward, risk control begins with the selection of customers. Banks should support customers who can make a profit and avoid ? Risky investment style? s loans, both of which have completely different risk-reward models. Because of the management? Problem customers are very costly. are very costly, banks should try to avoid them,? the best way to prevent being scammed is not to deal with scammers?

(2) Focus on the first source of repayment (i.e. the borrower themselves) rather than keeping the focus on focusing on mortgages and guarantees (i.e. what Western commercial banks call? bricks and mortar? culture). Rather give unsecured loans to good businesses than fully secured loans to poor businesses. A guarantee is only a guarantee, but definitely not the main source of repayment. Cash flow is the main basis for determining whether a loan can be made.

(3) from the loan spread is not a simple deposit and loan spread or profit, it is only as a bank to the relevant borrowers to issue loans to the corresponding risk of compensation. Based on this realization, it became necessary for Western banks to find quantitative data and models that could directly measure the risk they were thus exposed to when they granted loans: these included, among other things, the borrower's probability of default (PD), the expected amount of exposure to default (EAD), and the amount of loss given default (LGD). Naturally, quantitative credit risk management has become a very important task for advanced western banks in the past 15 years, so much so that consulting services companies have emerged to provide quantitative credit risk management models and data as their core business, for example, by the end of 2003, Moody's credit matrix metrics (credit?metrics) clients in more than 50 countries and regions, amounting to more than 2,000. By the end of 2003, for example, Moody's credit? There is a strong demand for quantitative credit risk management in the global banking industry.

(4) There is an upper limit to the return on a loan and no lower limit to the loss of principal. From a practical point of view, the maximum return on the loan is to recover the principal and interest on schedule at the interest rate specified in the loan contract signed with the borrower. However, if the borrower defaults, the loss involved will not be limited to the loan principal itself. Based on the above understanding, the advanced western banks have gradually developed a set of capital allocation systems and loan pricing models over the past 15 years, the core elements of which include: to ensure sustainable long-term development and the ability to bear the risks of their risky asset holdings, the banks must make sufficient provisions for bad debts out of their annual earnings in order to offset their expected losses; and to maintain sufficient common equity capital to meet unanticipated losses at any given time. common equity capital at all times to meet unanticipated losses; and to ensure, through rational credit pricing, that the revenues earned from customers are sufficient to cover the drawdown of the allowance for bad and doubtful debts and to ensure that a commensurate rate of return on capital is achieved.

(5) Concentration of loans does not lead to additional gains as concentration of equity investments does; rather, it leads to additional losses. Because, the expected extra credit losses or loss volatility, not only depends on the borrower's probability of default and the fluctuation of the loss rate of default, but also depends on the intrinsic relationship between the bank's credit asset portfolio. For this reason, advanced western banks usually monitor and measure the intrinsic relationship of credit portfolio losses at the following four levels, including risk ratings, industry, geography and single large borrower (group) risk, and reduce and minimize the chances of losses in the credit asset portfolio at the same time by implementing diversified management of credit assets, so as to control the negative impact of unanticipated credit losses within certain limits. Based on the above understanding, the western banks will set up a special department in charge of the credit asset portfolio management after the loan issuance, and optimize the asset portfolio through different financial markets, in order to reduce the portfolio risk and improve the portfolio return.