China's State-owned Commercial Bank Risk Management Studies

Risk management is one of the core content of western commercial bank management. The significance and urgency of the risk management in our state-owned commercial banks are becoming more and more prominent with the whole-scale opening up of our bank industry to outside world. By the end of 2006, our country will deregulate the foreign banks in their business scope and areas so that the banks at home and abroad can compete equally. The ability in operation and risk management decide the success or failure of the state-owned commercial banks. A tough task confronted the state-owned banks is whether they can increase their risk management ability as soon as possible in a short time and decrease the risk and thus develop healthily. Through careful study of the content and the cause of formation of risk concerning the state-owned banks, the thesis put forward my thinking and countermeasures in preventing and manipulating risks. My thesis is composed of the following four parts.Chapter One starts from the basic concepts of risk management of the commercial banks by explaining the cause of formation as far as the risks are concerned, the basic managerial principles and procedures as well as the contents of risk management in an attempt to familiarize the readers with the outline of risk management of our commercial banks. Then I introduced the theoretical development of risk management, thus providing the theoretical basis for the risk management thinking.Chapter Two depicts the specific patterns of the risk management of the commercial banks in western developing countries and try to find out the approaches that can be used for references in managing the risks by exploring into their successful experience in organization structure and internal management systems.Chapter Three expounds the contents of the main risks confronted our state-owned commercial banks in current situation and then analyzed the cause of formation of the main risks. I hold the opinion that the key factors that curb the improvement of risk management in our state-owned banks are as follows: the limitation of the property right system, the imperfectness of the credit legal system and the backwardness of the technological means in risk management.Chapter Four puts forward my thinking and countermeasures in improving the ability in risk management of the state-owned commercial banks based on the current risk situation with a reference to risk management theories and practices of the foreign banks. The thesis holds the point that the principal methods in improving the risk management ability of our state-owned banks are to perfect the system, the internal rectification and external supervision.