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Risk Control Of Our Commercial Banks In The New Basel Capital Accord

Posted on:2005-01-04Degree:MasterType:Thesis
Country:ChinaCandidate:Z H DaiFull Text:PDF
GTID:2156360152966239Subject:World economy
Abstract/Summary:PDF Full Text Request
The New Basel Capital Accord, which appeared publicly on January 16, 2001, will come into effect in 2004. The framework follows the supervisory concept of the 1988' s Basel Accord that took capital sufficiency rate as its core and gave priority to credit risk control. Meanwhile, the new accord lays emphasis on the risk supervision of state risks, takes in the three pillar principles-the minimum capital requirement of banking risk supervision, the exterior supervision and information revealment of the authorities concerned and the market restriction-advanced in the Core Principle of Effective Banking Supervision, and then puts forward a new concept of measuring the capital sufficiency rate. As a result, as the finance industry, especially the banking industry speeds to engage itself in the international market, it becomes an urgent problem that how to perfect the risk control mechanism and bring into full play the function of our banks so as to maintain the stability of the financial system in our country. It has been a problem that demands great attention and sound solution that how the commercial banks establish a set of effective risk control system in line with the New Basel Capital Accord in less than a year by taking advantage of advanced international risk control mode while considering their own risk environment and operation characteristics.This thesis consists of three chapters:Chapter one makes a comparative, vertical analysis of the contents of the Basel Accord. On the premise of the swift development of international finance, the continual financial innovations and the increasing risk that facing banking industry, it concludes a new risk control trend in the international banking industry-the appearance of the New Capital Accord and makes an introduction to its three pillars.Chapter two makes a comparative analysis of the current risk management situation of our commercial banks and the requirements of the New Basel Capital Accord and concludes that our banks betray such defects as capital insufficiency, increased financing cost, and lack of scientific and rigorous nature in risk control mechanism when the first-pillar is considered; in terms of the banks' exterior supervision, the authorities concerned fail to meet the requirements of the second pillar in such aspects as content, priority and mode of supervision; due to the inborn insufficiency of the management mechanism in our commercial banks, the organization of risk management and risk assessment system have difficulty in meeting corresponding requirements, which consequently makes it difficult for the third pillar to bring into play.Chapter three provides solutions to the defects that our banking industry shows when the New Capital Accord comes into effect. For example, in the condition of financial insufficiency and difficulty in self-accumulation, our commercial banks undergo the stock system-transformat ion, listing or issuing long-term secondary bonds, which is a trend to compensate for the banks' capital insufficiency and meet the stipulations of the new accord. In terms of the banks, a series of perfect risk assessment, forecast, control, auditing and supervision mechanisms should be set up within the banks. In their daily operation, the comprehensive risk management should be carried on and the financial risk assessment should be perfected. As for the exterior supervision over banks, governmental guidance and supervision should be strengthened. Not only the condition of capital sufficiency but also the establishment,perfection of the banks' interior risk control system and the risk assessment system are under continuous supervision. In terms of perfecting market supervisory mechanism, market mechanism should be introduced into banks and supervision over information revealment of our banks should be strengthened.
Keywords/Search Tags:New Basel Capital Accord, Commercial Banks, Risk Control
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