Raroc And Guiyang Economic Capital Allocation And Performance Assessment In Commercial Banks

A Great changes has taken in the field of bank management in past 20 years. The key point began transmit from assets liabilities management to capitals management of risks estimates. With the development of management , the competition among the international banks exposed in the areas of risk estimates ,risk management and economic capitals delivery. RAROC is the main way , applied by the western advanced commercial banks . Chinese financials opens to the abroad in Dec 11. 2006. The conditions of survivals and competition has changed for Guiyang commercial bank. We must faced the problem that the capitals was not enough, if we obey the rules of capitals supervise , the operating will be restrained . Therefore, we must improve the capitals circle rates. Meanwhile , to enlarge our operating range by using the limited resources.Obviously , this is a great challenge for us. So RAROC is a good approach to arrange the delivery of bank economic capitalsThis paper analysis the importance of delivery of bank capitals, and study the applicants of RAROC in the field of bank management. It includes risk cost estimates, economic capitals estimates and economic capital allocation. And analysis the difficulties by the way of RAROC. Then, we draw a creative plan for the development of Guiyang commercial bank , that is : at present , we can take advantageous of the preparation capital of loan to instead of the risk cost in the beginning of this plan. At he same time , enforcing to build the data base and elementary works . step to the internal Rating-Based Approach, find the risk sample that suited to ourselves. And to reach the destination of relying the risk management level completely...