The Study On Economical Capital Management Of European And American Commercial Banks

Since the1970s, with the continuous progress of finance globalization and liberation process, the global financial industry develop cross-borderline, financial activities run harmonized rules globally, the homogeneity financial asset prices tend to equate, huge international capital rapid operates worldwide, to form the trend of globalization. Every countries and regions interact with each other in the financial business, financial policy and coordination, mutual penetration and expansion, compete with each other and the constraints have been developed to a certain level, and thus make the global financial forming a closely indivisible whole.Economy globalization and finance globalization both have positive and negative effects. Positive effects are to promote economic growth according to promoting the development of international trade and investment. Negative effects are to speed finance virtualization, speculation and the bubble economy. The financial crisis transfers faster and faster, the international financial system become more vulnerable. With the development of financial globalization, commercial banks faces more and more risks, such as Italian lira and the British pound suffered impact in1992, the Mexican financial crisis in1994, the British Barings Bank speculative missed cause bank failures in1995, the Southeast Asian financial crisis in1997, as well as the U.S. financial crisis in2008. This fully shows that financial risk becomes more serious than those of any previous historical period.In the1990s, America Banking took the lead in the implementation of economical capital management. And then Barclays, JP Morgan and Citibank implemented economical capital management in varying degrees. At the beginning of the21st century, with the basis of integrating data and improving the algorithm, European and American banks promoted the application of the economical capital on a global scale, and gradually become an important basis for strategic decisions, and to establish a set of incentive and restraint mechanisms, making risk management and value creation organically combined, contribute to enhance the value of the bank. Chinese banks began to regard capital constraints as the core concept of risk management. ICBC, ABC, BOC and CCB have begun to study, explore and the gradual introduction of the economical capital management, and made great achievements. But there is still a certain gap in the implementation bottleneck progressively weakening; the design of the system is not reasonable, imperfect complementary measures.It is especially important that whether Chinese banks can safe and sound operation and sustainable development in the awe of financial globalization. With the comprehensive development of Chinese financial and banking, the policy of protection will gradually diminish. At the same time as the international financial capital flows in the range of our domestic and global high-speed and transfer, the risk will be exacerbated. Therefore, based on the sustainable and stable development of our economy, and actively absorb and learn from the advanced management experience of international banking, and improve the core competitiveness of China’s banks, as soon as possible to establish and improve a whole range of international financial sector development to adapt the financial operation of institutional mechanisms and the significance of financial risk control system, sound and sound risk control management mechanisms and means to enhance the operational efficiency of the domestic banking sector to accelerate the process of internationalization of the domestic banking sector overall, for the maintenance of the country’s economic and financial security. Meanwhile, China’s banking legislation on the world financial stage stable foothold and obtain rapid development, we must learn from the successful experience of international peers, through the implementation of economical capital management, and to achieve a comprehensive risk management, and the establishment of long-term risk management mechanisms, and improve the incentive constraint mechanisms, thus enhancing its core competitiveness.In this context, the paper is in defining the concept of economical capital, combing the theory, the course of the development on the basis of the economical capital management review, focusing on the key problem of the analysis of the economical capital of the commercial banks in Europe and America, the economical capital allocation and performance assessment system. Based on the combination of the practical situation of China’s economical capital management, aims to propose the construction of theoretical significance of the economical capital management system in line with China’s national conditions, this has important practical significance and far-reaching strategic implementation of economical capital management bank in China to enhance the ability to resist risks.The article is divided into nine sections. Chapter1Introduction part describes the purpose and the significance of the study. It also includes research literature not only describes the research of academic and research institutions, will also be introduced to the domestic and foreign regulatory agencies, such as the research of Basel Committee and the China Banking Regulatory Commission on the economical capital and regulatory requirements; Chapter2to explain the basic knowledge and content of the economical capital, including the concept of economical capital, economical capital management content, process and function, as well as the economical capital and traditional risk management. Introduction of the background on the economical capital economical capital management as an important tool of modern risk management, in its management processes to achieve the unity of the risk management and capital management, had a significant impact on the enhancement of the traditional concept of risk management; chapter elaborate the theory of economical capital management, including VaR theory, Merton theory, Monte Carlo simulation theory, as well as a combination of optimization planning and allocation theory. Chapters2and3is the basis of the theoretical part of the thesis, later expanded and exposition provides a strong theoretical foundation; Chapter4describes the course of development of economical capital management of commercial banks in Europe and America. Sort out the management of the development process of economical capital of commercial banks in Europe and the United States, a summary of its historical development and induction, combined with the development of the Basel Committee agreement, sprout, grow, develop, and transition management of the development process of economical capital of commercial banks in Europe and the United States is divided into four stages; Chapter5,6,7respectively measured at the economical capital of commercial banks in Europe and America, the economical capital allocation, and economical capital performance evaluation of three management status in each chapter ends with a summary of its advanced nature and problems of put forward in the implementation needs to be improved in China, is the core content of the paper; Chapter8, this article focuses, will combine the management status of Chinese banks’economical capital, innovation proposed the establishment of economical capital management system in line with the characteristics of China’s commercial banks; final a summary of research results, and to develop a future research plan.