The Empirical Analysis Of Commercial Banks' Operational Risk Based On Income Model

The serious loss in operational risk incidents attracts widely attention of the whole banking. In the New Basel Capital Accord operational risk is brought into the risk management framework for minimum capital supervision, which pushed the development of operational risk management. Because the study on operational risk is late in china and the management level is in the entry-level stage, various models and tools that measure and control operational risk comparatively lagged, operational risk incidents happened frequently. So the empirical analysis of operational risk' measurement and efficient management and control operational risk is the urgent task of Chinese banking. Under the background it has weighty operation significance to study operational risk measurement of Chinese banking.Firstly, the paper expounds the connotation, the sorts and the characteristics of operational risk. According to the concrete manifestation the paper points out the necessity and urgency of strengthening measurement of operational risk in Chinese banking, then finds out the main challenges of operational risk measure methods. In Chapter 3 the paper expounds all kinds of operational risk measurement and chooses income model that is most fit for Chinese banking. Because there are some defects in income model the paper improves the model. In Chapter 4 , taking example for three banks on the market the paper measure operational risk facing the three banks. When comparing relative value of the three banks' operational risk coefficient of variation is brought in. By analyzing the comparing result linking to the managing conditions of the three banks the paper demonstrates feasibility of income model. Finally, the paper combines the usage of operational risk measurement method in chapter 4, and summarizes the experience of operational risk management from the comparison between the empirical result of three banks and actual circumstance and then gives some advices.Innovation: 1.The improvement to income model, because a great deal of exterior factor exist , this paper chooses a series of variables at the foundation of continuous experiment and improves income model, besides, this raises the applicability of the model.2.With income model this paper collects the related data and carries on OLS regress analysis to three commercial banks one by one.Banking is a risky industry. The management conditions of banking directly affect the stability of financial system and the society. Operational risk is a complex domain as well as a new problem, and there are many problems to resolve. By studying advanced operational risk measurement technique and management technique, Chinese banking can form correct operational risk management ideas, strengthening operational operational risk measurement consciousness, exploreing accurate measurement model that is most fit for Chinese banking, gradually building up perfect operational risk management system, improving operational risk management level, then when competing with international banks our banking can succeed.