The establishment of internal rating system for small and medium-sized banks

With the requirements raised by Basel New Capital Accord, a lot of large banks have gradually finalized the construction of internal rating system after efforts in the past decade. For small and medium-sized banks, due to late start, imperfect risk system, lack of data and shortage in talents, they now face significant challenges in the establishment of internal rating system. Based on our rich experience in the construction of internal rating system for Chinese banking industry and the deep understanding of small and medium-sized banks, we discussed challenges and proposed solutions from night aspects in the whitepaper to help them establish standard internal rating and IT system and realize application, finally achieving the strategic transformation required by Basel New Capital Accord.