Research On Risk Management In Commercial Banks

Risk management is the strategic issue in the process of commercial banking development. The risks faced by international banking industries are increasingly complicated and this forced the commercial banks to emphasize and strengthen the control of risks. As a result, the management level of banking risk management advanced along with the development of the financial globalization, liberalization and innovation since 1970s. At the same time, the banking industries in China have learned unceasingly from their western counterparts the advanced management experiences in the reforming of Chinese banks and the level of their risk awareness and risk management have been upgraded substantially. However, due to the immature financial and economic structures in China, risks may expressed themselves in a more complex way. So the situation of and requirements for risk management in Chinese banks can be extremely tough. It is therefore very important for Chinese commercial banks to thoroughly understand the defects existed in their risk management compared with that of the international banking industries and find a suitable solution to deal with the risk management systems in China. It's also good for the improvement of risk management level and risks preventing.This thesis followed the course of the development of commercial banks and focused on the risk management object. It designed a set of management models for relative main banking risks in commercial banks, such as market risks, behavior risks, management risks and off-balance-sheet risks, which was based on research of related domestic and international theory and practice. Moreover, it discussed how to make management efficient and how to prevent banking risks by referring to the successful experiences of international sound commercial banks in combination with the internal and external environment in Chinese banking industry; Finally, this thesis put forward five practical solutions to improve the riskmanagement in China's commercial banking.The first part of this thesis recalled founding of the risk management theory and the content of "principal and agent" issue. Secondly, based on the current situation of the risk management within the Chinese commercial banks and the already existing problems compared with those of international advanced banks, it discussed and set up a structure of risk management for the domestic commercial banks. This thesis discussed further the main commercial banking risks such as market risks, behavior risks, operational risks and the risks of off-the-balance business, etc. As to these four different types of risks, it prescribed some proper management models specifically. In the last part of this thesis, the author combined the theory with the practice and presented the actual methods enhancing the management of risks for Chinese commercial banks from the five aspects such as risk management concept, management systems, management tools, management culture and information revealing, etc.