The Study Of Treasury Business Risk Management In Bank Of China JiLin Branch

The credit risk, law risk, market risk, operation risk and some other risks are contained in the treasury business process. The foundation of reducing the risk and increasing incomes is to make use of the modern and financial risk management theories to control the risk of treasury business. If we want to guarantee that the treasury business can operate effectively, we should identify the treasury business risk, measure the potential risk and build up a whole set of risk control system in order to control the risk affairs effectively.In this paper, we makes use of the theory of financial risk management and the management theory, we analyze and solve the treasury business risk management problem of the branch of Jilin province. At last, we hope to build up the treasury business risk management system to control the treasury business risk, maximize the treasury income and find the method which can improve the development of Bank of China's treasury business.The treasury business risk is the incertitude of the result which is in treasury business operation and managements, and the treasury business risk management is to manage the financial risk via the financial theories and tools. With the demand of treasury risk management assurance, in the range of authorization and the level of risk, we should guarantee that every risk management information can be passed to the decision makers and the management layers in time, find the potential risk and reduce it or even eliminate it, avoid violating the rules, and then set up the risk consciousness in the employee. The Jilin branch has a good development now, but there still exists a certain problem that represents in the following.Our understanding of risk management is limited to the level of audit and internal control, and we still lack a comprehensive risk management concept, and then the effectiveness of risk management is greatly reduced; Risk management before event and in the event is extremely weak, and the risk management is lack of effectiveness.;In the risk supervision, there is no good coordination mechanism between reward and punishment. People always excessively emphasize of punishment and neglect of reward, which makes the good original risk control methods encountered practical difficulties in the operation. The direct result of these disadvantages is too much emphasis in risk in business development and sacrifice of development opportunities;The risk management structure is imperfect. It means that the independent risk management and management system in modern meaning is still not built, and the weak management of treasury between the provincial branches makes it difficult to operate the risk management, and there are some flaw in the internal control system now;The risk supervision emphasizes in the administration, and we lack effective risk monitoring and quantitative criteria system. It is difficult to guarantee the supervision the risk supervision emphasizes in the administration, and we lack of effective risk monitoring and quantitative criteria system. It is difficult to guarantee that the supervision is scientific, and quantitative risk management is dropped behind A serious lack of management professionals and the level is not high.In order to solve the above problem, we must establish and perfect the Bank of China treasury business risk management system, which requires completion of three steps:First , To found the treasury business risk management system, it contains the mprovement of risk control measures ang risk quantitative management in treasury business of Jilin Province branch. The treasury business risk control measures of Jilin branch focus on the improvement of the framework of risk management systems. To lay a solid foundation of the implementation of the risk management, some factors play important roles. They are establishment of framework, such as identification to financial product risk, process risks (market, credit, legal, operational risk) and customer risk, risk leadership and organizational framework, and licensing and reporting system. This step is fully in the risk identification in base of scientific quantification of risks basis. The scientific and rigorous risk monitoring to ensure that the entire treasury business risk management implement well. risk quantitative management can make the treasury business risk management effectively.Second ,With the treasury business operational risk control and assessment (RACA) and the importance testing methods, we organize the work of risk management. In the basis of the establishment of the risk management framework, we operate the treasury business risk management of organization implementation to give a scientific testing process of risk management and ensure the effective implementation of control measures. An important way is listing the important points in risk control process through the control of treasury business for a detailed breakdown. The operational staffs in treasury business at all levels fill in the breakdown, and third person outside of the controller and executor makes inquiry, inspection and control. The aim of this flow is reviewing whether the implementation of important control is effective. The other is from the Royal Bank of Scotland's experience. We cite the treasury business operational risk control and assessment methods (RACA), treasury business department as an owner of operational risk regularly (quarterly) gives an overall assessment of operational risk and control measures, and use standardized tools to make a sustained record of the key risks, the probability of the risk and impact of the existing control measures, the full control of the validity of the remaining risk, risk preferences, the risks exceed the risk preferences to be taken by the control measures. These measures form a standardization process. This method is good for "distinction" of management and distinction of controllable, translatable, acceptable, evitable risk, and also good for scientific management of operational risks raised by external and internal events.Third , We bring in treasury risk management business performance evaluation, and promote the risk management and business development harmony and unification. The paper raises the concept and approach of the treasury business risk management performance evaluation as an innovation of treasury business risk management,emphasizes the function of the risk management, attaches importance to human factors in risk management, and tries to enhance the effectiveness of risk management in human resource concept such as communication, encouragement and so on. Ultimately, these methods guarantee the success of the first two steps and the self-improvement and development of risk management system. Treasury business risk management performance evaluation should contain six parts. They are the basic framework establishment of treasury business risk management, the construction of risk management culture, the risk identification, the establishment of risk assessment system, the establishment of risk "tolerance" evaluation system, and risk response and handling. We make the result of risk management performance assessment directly affects salary regulation, bonuses supply, duties movement, and some other vital interests of staffs. We make the decision-making, communication and implementation of risk management more smooth through the risk management performance assessment and promotion the clarity of power and liability and the effectiveness of risk management implementation. And in this case, the governor achieves an optimal decision in our whole bank system in the method of finding an optimal solution of risk management in the effective risk management model.The above steps will be able to guarantee the establishment and perfection of Jilin Province treasury business risk management system, and will make the treasury business operate and receive higher and more stable earnings in a lower-risk. Treasury business is the earliest and most comprehensive international business of the Bank of China. We should make sure that the maturity will continuously improve in risk control management. Despite some differences and deficiencies in the concrete implementation, to make sure the implementation of above research results and the follow of the mature contemporary international banking risk management ideas and experiences, the paper presents a series of constructive proposals.The paper contrasts the Jilin branch of the Bank of China with the experience of the large foreign banks and the Bank of China head office on the useful experience of risk management which is a part of reference, and demonstrates that the establishment and improvement steps of treasury business risk management system is operable. Because of the identity of the treasury business of the Bank of China and other banks, the paper not only demonstrates the case of Jilin branch of the Bank of China, but also has a reference sense of the cases of other banks such as treasury, international and investment business risk management.