A Research On The Risk Management Of Commercial Banks In China

Since the 1990s, the development of the financial markets has taken the world's attention along with global economic integration. But the huge potential risks have been hidden behind the ever-changing financial industry. In 2007, the U.S. sub-prime triggered the financial crisis. The risk management of commercial banks has once again aroused the concern of financial community, as the risk has been spreading so fast in the global pattern of economic integration, and caused severe damage to the banking industry. Joint-stock reform of Chinese banking industry had a good effect. However, we should not only think about how to catch up with others around the world, but also learn from the experiences and lessons, and study risk management combined with our actual situation, so that we can ensure Chinese banking industry to develop good and fast. Therefore, the paper selected "A Research on the Risk Management of Commercial Banks in China" to research. I hope to give some suggestions through a systematic analysis and elaboration to Chinese banking industry.This paper is divided into four sections. The first chapter introduces the definition and characteristics of the risks of commercial banks, and divides the types of the risks. The method of "five division" is the highlight, which concludes in accordance with the performance, causes, business types, control capabilities and the extent. Besides that, summing up the basic connotation of the risk of commercial banks and elaborating the necessity and reasons combined with the failure of risk management in 20th century. Secondly, summarizes the methods and functions of the commercial banks'risk management, through the introduction of the risk management implementation of the world's most authoritative association: Global Association of Risk Professionals (GARP), as well as the Basel Accord risk-management framework. The second chapter mainly analyzes the current status of the commercial bank risk management in China,and then makes a full introduction and the assessment for it through the changes of Chinese banking after the joint-stock reform,according to the real condition about the organizational risk management structure of State-owned commercial bank in China. And it will also reveal the shortcomings of risk management for the commercial banks in China according to the standards of the COSO ERM Framework.The third chapter introduces the new challenges of Chinese banking according to the financial crisis and the new Basel Capital Accord.The fourth chapter describes the capital adequacy ratio,capital regulation and information disclosure about the commercial banks in China,according to the innovation of the New Basel Capital Accord. At last,some suggestions will be made for the risk management of the Chinese banking in four aspects of bank risk management system, banking legal system, internal audit supervision of the bank and the management measures of those three types of risks,according to the problems and the challenges of the risk management mentioned above.