| Bank is operating in risky ventures, which decided that banks must accurately measure and manage all possible risks. On this basis, banks need to assess the benefits of risks, but also to prepare the appropriate capital to absorb the loss arising from the risks. As a result, the bank's management is to promote the sound development of "capital, risk, income". Over the past 10 years, the banking sector in the West gradually found a new set of bank risk management instruments -Economic Capital Management, it will lead to the organic unity of "capital, risk, income". From the practice situation, the economic capital management is increasingly becoming the bank's core management technology of the listing banks, and most likely evolved into a modern banking standards and systems management tools.On the current situation, China's commercial banks lack of awareness of the importance on capital management. Commercial banks have a strong bias towards the total asset growth and branch expansion, and lack of awareness of the capital constraint. China's banking industry as a whole has a high risk and can not adapt to international competition. As a result, China's banking sector to strengthen risk management and capital management, is of great significance to the whole stability of the financial system running. In this article, the Economic Capital Management's research of the Commercial Bank has strong practical significance.First, this article analyzed the economic capital and the management of economic capital. By studying the connotation of economic capital and the economic capital management system of foreign commercial banks, China's commercial banks get a lot of inspiration.Then, this article introduced the use of economic capital management practice for China's commercial banks, as well as the significance and role, and proposed ideas and the overall program.On this basis, this article analyzed the economic capital management of the Bank of China and a detailed analysis of how RAROC and EVA model to evaluate a branch's performance. Finally, this article comed up with strategies and recommendations for the problem of the economic capital management of China's commercial banks. |
