Commercial Bank Risk Management Research

Profits are always accompanied by risks. No risk, no profit is old saying. The only difference between them is that their risk degree are different. This is an elementary principle of market economics.The idea of risk management came into being at ancient time. As a theory, it was initiated at the beginning of this century. Modern risk management theory is a new subject separated from and correlated to modern management theory. After many year' risk management practice, western commercial banks have accumulated rich experiences, which forms a systematic theory of risk management , and summarized serious methods of risk management of commercial banks. To absorb the rational parts from the western theory and combine with our practice and experience will improve our own risk management and is of great significance in our banking operation. This is the intention and purpose of the thesis. This paper is composed of four chapters.Chapter one summarizes the changes of running conditions after 70s' of western banks, it analyzes the risks brought with the financial freedom and innovation as well as the development of commercial bank internationalization. And enumerating the serious financial crisis happened recently in international banking world explains that following with the changes of operating environment of commercial banks and owing to their backward supervisory operating system, the factors of business risks have been increased largely. It also states whatever to do to meet the need of financial stability or their self- development, the commercial banks are pressed to emphasize the study of risk management theory and the research of anti-risk skill.Chapter two emphatically discusses the serious matters of risk management of commercial banks. In section 1,it studies the common risks of commercial banks, and analyzes the existing modalities of commercial bank risks. It demonstrates scientific warranty for selection of commercial bank risk management. Section 2 introduces the developing process of theory of commercial bank risk management, and states out clearly that toachieve the balance of reliability, fluidity and profitability, commercial banks must take the chances of economic circumstances and conditions of banking operation into seriously consideration when managing their assets and debts. Section 3 analyzes the constitution of commercial banks' risks management system and the performance.Chapterlll follows the examples of western commercial banks, especially the practical experience of risk management of American commercial banks, it has reviewed the commercial bank management of flowing risks, credit risks, interest risks, exchange risks and financial innovation risks, and studied the main methods of American commercial banks' credit risk management and the main countermeasures against derived risks from financial innovation process.Chapter IV reviews the problems in our commercial bank risk management. It indicates how to take full advantages of the basic principles of western commercial bank risk management and how to combine with our special practice to constitute and complete our method and system of our commercial bank risk management, and further to consolidate our commercial banks for purpose of improving capital quality and increasing economic effects.