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Loan Default Table: A Method to Measure the Loan Default Possibility for Commercial Banks |
PENG Jian-Gang, YI Yu, LI Zhang-Fei |
Hunan University, Changsha, China |
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Abstract Based upon the fivedegree loan quality classification, this article puts forward loan default table method to calculate the possibility of the loan default. Based on the customers’ credit ratings, this method can measure the possibility of the loan default timely on the basis of customer's credit rating. The proposed method is designed to facilitate the measurement of the expected loss and unexpected loss of the loan portfolio for the Chinese commercial banks .
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Received: 07 April 2008
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