Comparative Study On Operational Risk Management Between Chinese And Foreign Commericial Banks

Since bank of Bahrain of Britain went bankrupt in 1995, operational risk has been concerned by the fnancial institutions and regulatory organizations. Basel Committee adopted the"New Basel Capital Accord", which considered operational risk, credit risk, and market risk as the three major commercial banks risk and required financial institutions to configure the corresponding capital for the operational risk on banking supervision in June 26, 2004. Compared with the foreign banks, Chinese commercial banks concerning about the operational risk was relatively late. Because major cases frequently happened in domestic commercial banks in rencent years, we began to concerned about operational risk and its management, and operational risk management was relatively backward.The purpose of this paper is to introduce the theory of the operational risk, compare Chinese commercial banks with foreign commercial banks on operational risk management, find out the gap of operational risk management of China, and improve the level of operational risk management of China.The introduction section of the paper expounds the background of the topic, the basis, and describe the related literature review, then introduces ideas, methods, and frameworks of the paper briefly. The second chapter discourses the development history, the contents, and the principles of operational risk management. The third chapter compares Chinese commercial banks with foreign commercial banks on the culture of operational risk management, the organizational structure of operational risk management, the processes of operational risk management, and operational risk measurement by the main components of operational risk management, in order to find out the deficiencies of operational risk management of Chinese commercial banks. The last chapter propose appropriate countermeasures from the culture of operational risk management, the organizational structure of operational risk management, the processes of operational risk management, and the quantification of operational risk management in order to strengthen operational risk management of Chinese commercial banks.