Some Discussions Of Legal Issues On The Compliance Management Of The Bank

With the adoption of the enterprise risk management principle of theinternational banking and the eruption of compliance failure cases in allkinds of banks, the compliance management, as an special risk managementtechnique, is brought into the bank's enterprise risk management frame(the credit risk management, market risk management, operationmanagement and compliance management). Under this background and focuson the practice, the author compares and analyzes legal issues on thecompliance management and puts forward the establishing and improvingsuggestions.Chapter 1, this article firstly makes a research on the definitionof compliance and introduce the legal sources of compliance, meanwhile,this article discusses relation between compliance and internal control.Then, the necessity of the compliance management in the bank and thecompliance management system (such as the definition, and the risk it isdecided to prevent) is discussed. Besides, the author expounds the demandsof "the Compliance and the Compliance Function in Banks", which ispublished by the Basel Committee on Banking Supervision on Sep21, 2005. Chapter 2, the author focuses on the legal construction and thedevelopment of the compliance management, in order to find the reasonablefactors for the Chinese banks to use for reference.Chapter 3, the meaning of the compliance risk is expounded and themain goal of compliance management is defined. Subsequently, the authorcompares and analyzes the relationship between compliance department andlegal department, internal audit department, audit department andsupervision department, and illuminates the legal orientation of theCompliance department and its authority. What's more, the main threepatterns of the compliance department's organization form are probedinto and the pattern most appropriate for China to follow at present isanalyzed and demonstrated.Chapter4, the establishment and improvement methods of our compliancemanagement system is researched, Firstly, the shortages of the actualityof compliance management in our country are expounded. Then, from themodern Chinese legal resources, the author puts forward the assumptionon how to design compliance management in our country.Lastly, the author discusses the operational criterions which shouldbe constituted in order to improve compliance management legal system,in which the article focus on discussing the responsibility of thecompliance management and compliance staff, compliance reporting line,compliance culture and so on. By analyzing cases, the author expatiateson the importance of a consummate interior bylaw system to compliancemanagement and on how to improve interior bylaw system. The compliancedepartment should act as a window between the bank and the exteriorsupervision in order to make the compliance and supervision interactive.