The Study On The Optimization Between Benefit And Risk Of Commercial Bank

With the sharp development of global economic, the external environment ofcommercial bank is becoming more and more complicated, at the same time, thebusiness is diversified, and the competition in this industry is becoming intense. All ofthose are claiming a higher management level of commercial bank. As the mostimportant aspects of bank management, the benefit and risk has attracted more attention.The benefit and risk of commercial bank should be coordinated in the ideal state ofcommercial bank, in other words, the benefit created by unit risk should be maximum orthe risk beared by unit benefit should be minimum, this two aspect should be balancedand optimized. This is the basic and starting point of this paper. We selected the data of16listed banks in China as samples, seeked for the optimum situation of commercialbank, which benefit and risk were coordinated, by constructing indicator system,building models and some other methods.This paper is composed by five chapters:The fist chapter is introduction, this part introduced the background and significantof this topic and combed historical documents, and put forward the main argument ofthe paper: the coordinate of benefit and risk. And then the part introduced the maincontents, methods and possible innovation of the article briefly.The second chapter is a quantitative assessment of the Benefit and Risk. I selectedthree benefit indictors and three risk indictors, calculated the benefit index and riskindex by the method of factor analysis. Then we get an intuitive and comprehensiveevaluation of the Benefit and Risk of each sample, and at the same time laid thefoundation for the model building and optimizing later.The third chapter is the establishment of benefit models and risk models. I take theindexes as explained variables, and take the factors that affect the benefit and risk ofcommercial bank as explanatory variables to establish the benefit model and risk modelrespectively, including overall models and classification models. The overall models areestablished by the method of panel data estimation, and the classification models areestablished by the method of matrix solving.The forth chapter is coordinate the relationship between benefit and risk. Iestablished the theoretical coordinational model of Benefit and Risk according to themulti-objective optimization methods and the reality situation of banking industry inChina. The coordinational model took the risk model and benefit model in chapter3as objective function, constrainted the variables based on reality and regulatoryrequirements, and finally getted the best benefit index and risk index which satisfied thecoordination of them two and the value of these variable and indicators in this situation.Then, I did a simple analysis of the optimization result.The fifth chapter is conclusions and recommendations. In this section I firstlysummarized the conclusions of the whole text and cleared the adjust direction of bankindustry, then proposed some suggests and recommendations for the bankmanagements.