Research On Operational Risk Management Of Commercial Banks In China

According to the New Basel Capital Accord, the banks are facing three kinds of risks:operational risk、credit risk and market risk. The international banks has done many researches about the latter two, but as a new kind of risk, the operational risk still needs more attentions especially in the domestic commercial banks. Seeing from the financial case occurring in the latest several years, the operational risks’situation of domestic commercial banks is quite rigorous. So it is very important to build the perfect risk management’s structure and introduce into advanced technology of risk management.At the beginning of this paper will introduce the importance and urgency to do researches about the operational risk. The current of operating risk management research still faces many problems, such as no perfect management framework; do not have the appropriate measurement method; the bank employees’lack of adequate understanding of operating risk and the operational risk insufficient data loss.To manage the risk well, first, we need to know more about the risk.In the chapter 2 of the paper, we will introduce the most basic definition of the operational risk. Including the broad sense and narrow sense, also includes Basel association standard definition of operating risk to their national conditions and countries for standard definition of Basel put forward the improvement; Then introduces the characteristics and types of operational risk. Different bank according to its business types of different and the size of the banks face different operational risks.On a certain understanding of operational risk, the paper will briefly introduce the measurement method of the risk. The current international has developed more advanced operating risk measurement methods, such as the extreme value theory method based on CVaR model; based on L-M algorithm and the fuzzy optimization combined the BP neural network of operating risk evaluation model and the operation of the risk incentives based on key risk management system, etc. But considering that this paper is mainly discusses domestic commercial Banks operating risk management, and these are difficult to apply advanced measuring method of China’s banking, so the paper introduces some more basic and applicable methods, such as the new Basel capital accord puts forward three basic methods:basic indicator approach, the standard method and the internal measurement method senior measurement method and loss distribution method, etc. and the paper introduces CAPM model method (revenue model method and securities model method), this text will use this method to measure the operational risk.In the chapter of 4 of the paper, we use revenue model for measurements of CCB’s operational risk, the results found the bank’s income and GDP growth is inversely proportional to the relationship, it does not accord with the economic significance, so on the basis of model, we improved the Rate of Not-performing loan joined the model. Though the Eviews, we choose some indicators to improved the model and make it more fit with CCB’s condition. Based on this model, we can eventually preliminary estimates out the construction of operational risk facing CCB.Through the quantitative analysis, we can find at present there are a lot of problems on manage the domestic commercial Banks’ operational risk, leading to quantitative analysis of operating risk is difficult, and due to the lack of data loss to the analytic result, also hard to carry on empirical test. This aspect of operational risk management has brought great inconvenience; on the other hand for domestic scholars operate risk research also exist great obstacles. Therefore, the domestic commercial Banks is in urgent need to build the operator for the bank risk management framework, the paper in the last chapter introduces the domestic commercial Banks of operating risk management to point.In conclusion, I make an attempt to explore and analyze our country commercial banks’ operational risk management, basing on the financial theory during reading for master’s degree. But my ability is limited, so there may be some error and careless mistake. Please criticize and correct, and I will go on working hard for the future.