| Economic capitals management is one of the most popular capital management in 20th century. The Sub-branch of BOC is living in the first line of business. In the context of economic globalization, the risks it face is increasingly complex. Therefore, we have to identify and control risks effectively. Since 1980's, the major method of risk measurement in western country have been confronted with quantitative model technology. The models laid the foundation for banks'accurate measurement of credit risks. At present, BOC's credit analysis is just staying at the basis of qualitative analysis. From the perspective of portfolio, credit risk analysis is at an early stage. Therefore, to adapt to the pace of economic globalization and keep an invincible position in competition, sub-branch of BOC need to learn advanced methods of credit risk measurement. Subsequently, we can develop it for our own credit risk measurement techniques.The development and implementation of economic capital management system improve the risk management of sub-branch of BOC. Consequently, this paper is working on sub-branch of BOC's economic capital management. At the beginning, the author puts forward the meaning and the main framework for economic capital management; Secondly, the paper introduces the status of economic capital management about four major state-owned commercial banks and sub-branch of BOC. Followed the introduction, we learn the characteristics of sub-branch of BOC and we must use modern credit measurement methods. Then through the comparison on credit risk measurement methods:Credit Metrics,Credit Risk+,Credit Portfolio View,KMV.We learned that Credit Metrics is the most appropriate model. After the empirical analysis of the risk measurement, we can conclude that Credit Metrics model proved to be more accurate. At last, we can learn experiences from domestic and international banks, then put forward suggestions on sub-branch of BOC about economic capital management. |
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