Study On The Operational Risk Of Our Commercial Bank In The Angle Of Internal Control

Many financial criminal cases have happened frequently and brought huge loss to our banks since 2005, and it has made a great shock to inside and outside of our banking industry, then in the same year the China Banking Regulatory Commission decreed .The'operational risk'issue has just been concerned by the Chinese financial sector. To avoid and control operational risk more efficiently, the China Banking Regulatory Commission as well as decreed in June,2007.The paper commences on the relationship between operational risk and internal control of commercial banks, and realizes the operational risk's characters,the operational risk management's status and the deep reasons for the operational risk's differences between the domestic and foreign commercial banks by comparatively analyzing the loss data on operational risk of the domestic and foreign commercial banks, then more finds out the main reason for inducing operational risk in our commercial banks: faulty internal control makes operational risk occur frequently. On this basis, the paper tightens internal control which plays an important role on causing operational risk to design the model for measuring operational risk, and that internal control evaluation can judge whether the internal control system runs well or badly and whether the ability of controlling operational risk is strong or weak, meantime the capital allocation methods for operational risk provided by New Basel Capital Accord is not suitable for the actual operating risks faced by China's commercial banks. Therefore, the paper will integrate internal control and the method of measuring operational risk in New Basel Capital Accord which is amended by the internal control evaluation, not only fitting the international measurement standard but also linking with the actual situation of our commercial bank, and aims at allocating economic capital for China's commercial banks to improve the ability of resisting risk.