Operational Risk-based Perspective On Commercial Bank's Internal Control

In recent years, some banks have taken place in several cases caused by the operational risk of major cases, exposing the management of commercial banks, the problem of weak internal controls, which also contributed to the operational risk loss events of the most important reason. Banking is a business currency trade, but also operational risk industry. Ability to effectively guard against all kinds of risks, particularly operational risk is directly related to the bank's development. At present, banks face the risk can be roughly summed up as market risk, credit risk and operational risk, compared to the first two already attracted the attention of financial institutions and have a relatively sophisticated and comprehensive risk management framework. Despite the long and the operational risk exists, but a long time have not been the concern of the banking and regulatory authorities, until the twentieth century, the international and domestic banking sector after the nineties have seen a series of significant operational risk events, brought to commercial banks huge financial losses caused to the community at the same time is also a great deal of negative impact. Operational risk of the banking industry, therefore, regulatory authorities and scholars wide attention and high priority. Until 2004 the Basel Committee issued the "New Capital Accord," it gives the definition and operational risk management standards. However, understanding of operational risk due to a late start, the current study is still emphasis on the use of targeted market risk, credit risk research ideas, emphasis on the study of quantitative models, but will operational risk and internal controls, corporate governance and other related basic theories few studies to link.This paper first reviews the domestic and foreign scholars of commercial banks operational risk research results. Then the definition of operational risk, classification, characteristics and operational risk loss events in China in recent years, the analysis elaborated; then the internal control of commercial banks, the basic theory studies, which examine the development of internal control, definition, elements as well as the role and significance. By definition, two aspects of the role and function analysis of operational risk and internal control of the relationship between the draw of internal control is the operational risk management methods of the most fundamental conclusions of the study laid the basis for this article. On this basis, using the 2008 French Society General bank-fraud case by case review, analysis of its revelation of China's financial institutions come to the absence or failure of internal control is the operational risk loss events caused by the continued occurrence of the important reasons. Finally proposed to improve the internal control of China's commercial banks, from the five elements of internal control starting, classification set out various elements of sound elements.In this paper, operational risk perspectives to build a sound internal control framework. In short, through the study of the paper, the authors believe that a sound internal control system is to solve China's current operational risk events continue to occur, the problem of financial assets continue to lose some fundamental way.