Operational Risk Management Of Commercial Banks In China

The banking industry is a high risk profession, the guard, management and meltdown of the risk is the eternal subject of the banking industry development. In recent years, some big loss events forced the banking supervision authorizations to be aware that some risks other than market and credit risk can be substantial—"Operational risk".Basel Committee on Banking Supervision (BCBS) has issued its new international capital accord in June, 2004, in which the operational risk management and regulation principles have emerged, and the economic capital of operational risk was requested. So, it is very necessary to study and research the attitude of operational risk regulation of BCBS, make clear the target and methods of BCBS regulation, in order to make progress of operational risk management of Chinese commercial banks. This is the goal of the thesis.Although there are many articles written by local experts focused on the operational risk management in China, we feel regretful that: some articles fully received the Basel II Capital Accord as well as its spirits and use it to guide our practices without further consideration of China's special circumstance, other articles only focused on the local practices without the worldwide vision and thoroughly understanding of the Basel II Capital Accord. It is very hard to find an article which could use the new capital accord spirits critically and constructively to guide the practices of operational risk management of financial institutions in China after deeply research the special local circumstance. So, with the investigation of China's banks risk management circumstance and the advice from foreign financial institutions, we try to provide China's banks some sound advice concerning operational risk measurement.Firstly, introduce the theories of operational risk management. Secondly, priority introduces Basel Committee on Banking Supervision's definition and classification about operational risk. Then systematically introduced quantitative methods in operational risk measurement, especially make generality introduction and discussion to the quantitative methods of operational risk provided by BCBS, and give some innovative review on different methods. Thirdly, analyze the performance and characteristic of our country's commercial bank operational risks, present condition and existent problems of operational risk management, and the reason of these problems. Lastly, introduce many management methods of the operational risks, and carry on creative analysis and evaluation to some concrete methods, and combining our national conditions with the research before give some creative advices.