A Research On The Value Creation Of The Commercial Banks Based On The Risk Management

Risk management has been with commercial bank since its born. As a special enterprise operating money, a bank with low risk must be welcomed by the customers and so earn more profit. Thus, risk management becomes the base of the profit of a commercial bank. However, people have been treated risk management as a method to ensure the stability of the bank so as attract more customers. When we consider the banks'ability of value creation, risk management will function far more. As the value a bank is measured not only by the profit but also the discount rate related to the risk of the bank, risk management will increase the bank's value by fall down the discount rate. As the ability of value creation has become an important fact when valuing a bank, it is essential to have a look on the impact of risk management on the value of the commercial bank.In the beginning, the paper defines the value of the commercial bank used in the paper and how to measure it. Then the paper discusses the importance of the risk management by analyzing of the bank's capital structure, the development of bank's risk management theory and the theory of value maximization. In the next part, the paper makes further analyses of the effect of the risk management on bank's value with the respect of the management of credit risk, market risk and operation risk and the risk management in the risk configuration market. At last, the paper makes a quantitative analysis by the data of the Bank of China and gives some suggestions on the improvement of the risk management of the bank in our country according to the result of the analysis.