Study Of The Internal Control System Of A Modern Commercial Bank

With the process of liberalization, innovation, nationalization and market unity in all the nations' finance, the problem of crisis is more and more standing out. A lot of financial crisis prove that the serious defects of the internal control system in commercial banks is the fundamental reason which induced the financial crisis or bankruptcy of many banks. Therefore, the research on the construction of the internal control system in modern commercial banks has important sense, both theoretically and realistically.On the issue of the internal control system in commercial banks in China, many experts have probed into it from different ways in recent years. But their research emphasized particularly on microcosmic manipulation and gave priority to the study on business control and manipulation procedures. But their research is short of deepness and systematization. In the first, this paper study the base and external environments of designing the internal control system, and then analyzes it macroscopically, studies the issue of the internal control system of commercial banks from the aspect of theory. Lastly, the paper brings forward the elementary thought of constructing and perfecting the internal control system in commercial banks practically.To solve the above problem, the first part of the paper analyzes the background of the internal control system in modern commercial banks, primarily explains "what is the internal control" and "what is the internal control in commercial banks", definites them intensively and extensively, and puts the internal control environments into the study of the internal control system in modern commercial banks. This part also analyzes the theory of the internal control system in commercial banks, points out the necessity of the construction of the internal control system in commercial banks primarily according to the theory on financial frangibility, the theory on market and property rights restriction, and gives comments on the three theories. From the analysis, this part thinks that property rights system in modem banks is the basic system of modern commercial banks, which adapt to market economy, and share-holding company should be the major form of the property rights in commercial banks. This paper considers that efficient internal control system, market restriction and property rights restriction is crucial to solve the proposed problem. On this base, the paper analyzes systematically the evolvement of the internal control system of commercial banks in the world, gives prominence to the request for the internal control system by the , which abundantly embodies the core thought that the design of internal control system should give priority to risk control. The second part of the paper regards the foreign commercial banks as frameof reference, deeply analyzes the internal control in commercial banks from the aspects of the property rights system, governance structure, the scientific risk evaluation mechanism and the operation mechanism of the internal control system. This part exposes the elementary characteristics of the internal control system hi modern commercial banks, advances the common pattern to construct the internal control system, and offers the thought on improving the construction of the control system hi commercial banks in china . The third part analyzes the creation process of the internal control system in commercial banks in china, and emphasizes the problem and its reason of it on the condition of the unitary property rights. The fourth part puts forward the thought of the construction of the internal control system in commercial banks hi china. Firstly, we should have innovative thoughts, build up the sense of market, law and credit and cultivate the culture of commercial banks. Secondly, we should make innovation hi the system, speed up the process of share-holding oriented reforming in the state-owned commercial banks, improve the governance structure, put focus on innovation hi the operation system of the banks in china.