The Transmission Of Commercial Banks' Risk And Construction Of Overall Risk Management Framework

Risk management has been of importance to the survival and development of commercial banks all the time. Since the end of the twentieth century, the theories of overall risk management have been the mainstream of the risk management thought. With the fulfillment of the WTO agreement on complete opening of financial market, the increasingly fury competition among banks and incessant of financial innovations, Chinese commercial banks have to follow the tide and speed up the course of overall risk management construction for survival, development and growth. Thus, the question of how to set up overall risk management framework on the basis of special history background and mechanism of Chinese commercial banks has become an urgent problem in practice.The overall risk management depends on identification and supervision of the risk, which relies on well awareness of location and transmission of the possible risk at first. With the reference of various risk management theories and research, focus on the commercial banks' risk and its transmission path, this essay starts with the inner business and management procedure, then sets up the framework of overall risk management in commercial banks on the basis of the studies on the banks' operation and management process.To set up the overall risk management framework, we should be equipped with the concept of overall risk manage at first, based upon understanding of its design and the current risk condition of the bank. Then the risk information database and the information channel should be set up, and the risk management decision-making and executing system should be established to make decision on how to deal with the internal and external risk inspected, and to execute these decision. At last, we should be equipped with the risk management maintenance and the feedback system, to valuate the operation efficiency of the current system, to do research on the application of the new risk management techniques and the implementation of the new management regulation, and to optimize the current risk manage system continuously. Moreover, the overall risk management framework needs a good exterior environment to diminish the harm of risk from outside.