Research on Impact of Moral Hazard on Individual Credit Risk | Zendy

Shuai Li | Zendy; Yang Yang | Zendy; Zongfang Zhou | Zendy

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Research on Impact of Moral Hazard on Individual Credit Risk

Author(s) -

Shuai Li,

Yang Yang,

Zongfang Zhou

Publication year - 2014

Publication title -

procedia computer science

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.334

H-Index - 76

ISSN - 1877-0509

DOI - 10.1016/j.procs.2014.05.304

Subject(s) - moral hazard , loan , actuarial science , hazard ratio , hazard , probability of default , credit risk , morale hazard , computer science , econometrics , economics , confidence interval , statistics , mathematics , incentive , finance , microeconomics , general insurance , chemistry , organic chemistry , insurance policy , auto insurance risk selection

Moral hazard is a prominent issue in personal behaviour of credit risk management. This paper considered the bank loan interest rates as the control variables. It analysed the relationship between the default probability and the probability of the occurrence of moral hazard of individuals and the impact of moral hazard to individual credit risk mechanism from the theoretical level. The results show that: (1) the bank loan rates have strong effects on both the moral hazard of personal loan and credit risk. (2) The relationship of the probability of the occurrence of moral hazard of individuals and the default rate of individuals is generally non-linear. However, there is a constraint interval of the default rate. When that interval is determined, the probability of the occurrence of moral hazard of individuals and the default rate of individuals has linear relationship, and the bigger the interval is, the smaller probability of the occurrence of moral hazard is

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