Research On Operational Risk Management Of Rural Credit Cooperatives

Since the establishment of bank, its main function is to operate currency. Therefore, risk is the major threat which influences the steady and sustainable development of the banking sector. The international financial crisis burst out in 2008, which brought out heavy strike to the development of global economy. One of the main reason is that banks haven’s paid enough attention to operating risk. Nowadays, as the sustained and rapid development of economy, people’s financial services demand is growing increasingly and the banking sector in our country has entered a period of rapid expansion. However, as the immaturity of the external regulatory environment and self-management, the operational risk cases have occurred frequently and a wide range has been influenced and a lot of money has been involved, which has caused huge commercial losses to commercial banks. Therefore, the management and research of operating risk is essentially urgent and important to commercial banks.This paper includes six chapters:Chapter one mainly states the background and significance of this research. It emphasizes the significance of the management of operating risk to commercial banks. Then it introduces the main context of this research, the research methods as well as the current research situation of the operating risk management both at home and abroad.Chapter two describes the basic concept, classification and features of operating risk according to the New Basel Capital Accord. It also lists several dominant measuring methods of operating risk. Finally, it briefly states the relevant theories of internal control, process reengineering and system management.Chapter three firstly introduces the basic condition of TS Rural Credit Cooperatives from the aspects of historical development, service ideas and business scales. Then it further elaborates the current situation and major problems existing in the management of TS Rural Credit Cooperatives’operating risk.Chapter four is based on the problems existing in the operating risk management of TS Rural Credit Cooperatives and then analyzes the reasons behind it from the factors of staff, institution, system and external.Chapter five explores the way to improve the management of operating risk for TS Rural Credit Cooperatives. And the author further provides some specific measures:improving the quality of staff, improving internal controlling mechanism, optimizing system function and strengthening the external controlling.Chapter six summarizes the paper and emphasizes the necessity of the management of operating risk. It also presents some expectations and prospects of the management of operating risk for TS Rural Credit Cooperatives and banking sectors.