Grassroots Institutions Of Commercial Banks Operating Risk Management Study

In recent years, because operational risk in the commercial banks resulted in frequent huge losses, Financial institutions pay much more attention to it than credit risks and market risks. The Basel Committee firstly incorporates operational risks into the capital regulatory framework for banks in the New Basel Capital Accord in June, 2004. Although the China banking industry does realize the importance and danger of the operational risk, there are still data unavailability, imperfect management framework, poor regulation and inadequate disclosure of information, which need to be solved promptly. This paper tries to discuss the problems related to the operational risk by integrating the theory with the practice and combining the qualitative analysis with the quantitative analysis, and finally put forward the conception of the operational risk management framework within the grassroots financial institutions of the commercial banks.The essay begins with elaborating the background, the research mentality and approaches, and summarizes the theory of operational risk management .Then at the basic level in Chinese commercial banks, revealed five kinds of concrete forms detailed and objectively. After the paper put forward the conception of the operational risk management framework, which consists of four aspects: establishing the economic capital management basis; perfecting interior controlling measures; building the healthy opertional risk management culture; improving the operational risk management organizational system. Finally revealing the reason and the measurement method for the opertional risk, the article made an empirical analysis on ICBC Yancheng branch.