| Summary: | 碩士 === 國立雲林科技大學 === 財務金融系碩士班 === 101 === Recent years have seen constant change in the global financial market. In late 2005, there was the outbreak of the dual-card crisis, which wrought serious damage to banks in Taiwan. Then there was the American subprime mortgage crisis in July of 2007, which dealt a blow to financial institutions worldwide, and led to the 2008 financial tsunami. In this ever-changing environment, risk control issues are subjects of great concern. Banks absorb the general public''s deposits, then use the funds for loans or intermediary financial instruments. Hence, banks have an obligation to fulfill their management responsibilities.
Between 1991 to 1992, the government approved the establishment and operation of 16 new banks, and simultaneously also approved the applications made by trust and investment companies, large credit unions and small and medium-sized banks to be restructured as commercial banks, thereby doubling the number of such banks. This brought about excessive competition between financial institutions to gain market share, specifically through price cutting, lowering loan interest rates or relaxing credit conditions. As a result bank profits were reduced. In the event of an economic downturn, they could easily become unable to write off bad loans. For this reason, a credit risk assessment model was established, able to identify effective risk factors and reduce bad loans, thereby increasing profitability in banks.
In this study, logistic regression analysis was adopted to arrive at a risk rating based on seven risk factors: gender, seniority in employment, current ownership of residence, marital status, discrepancy in loan application and approval, credit card usage, and joint credit score. A bank can then adjust its risk control operations accordingly. In addition, this study added cost as a factor for consideration, finding that several normal loans would be needed to compensate for the generation of one bad loan, and achieve breakeven. Therefore, only a stable and conservative modus operandi can ensure the profitability of banks and the deposit of public assets.
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