Application Of Economic Capitals Management In The China's Commercial Banks

The banking industry is involved closely with risk. The two key issues which the modern finance focuses on are risk measurement and risk control. The management of economic capitals has attracted a lot of attention as a risk measurement and control means since it emerged in the 1970s. Given fledging application of economic capitals management in China's commercial banks and limited researches on the field, both in theory and application, this paper discusses the theory and method of economic capitals management. The case studies of economic capitals management further analyze how economic capitals are used and function in the risk measurement and risk control. The paper also indicates the problems involved with economic capitals management facing China's commercial banks.