The Research On City Commercial Bank Of China Economic Capital Management

In recent years, economic capital management has been widely used to optimize the allocation of resources and implement for comprehensive risk management in the advanced banks. By the economic capital, banks can quantify of its exposure to various risks,and calculate the amount of capital to cover risks. So that banks can consider the cost of risk in planning its future development strategy, to ensure that banks meet its regulatory capital requirements. As an important component of China’s banking, city commercial banks have made great development in past ten years. But its risk management still has some problem, which seriously hinder the city commercial banks sustainable development. Advanced economic capital management ideas needed to be introduced to improve the risk management of city commercial banks. Therefore, the research in economic capital of city commercial banks has a great significance of improve management of city commercial banks in China’s competitiveness and promote its development.This paper aims at depth analysis of the theory of economic capital, combine with particularity of China’s city commercial bank risk management, and improve economic capital management methods, to improve risk management and competitiveness of city commercial banks. Firstly, this paper introduced economic capital management theory of commercial banks, and discussed the advantages and disadvantages of city commercial banks on the implementation of economic capital management. Then, the status of implementation of economic capital management was investigated. Finally, based on the particularity of city commercial banks, the implementation of economic capital management methods and further strengthen the economic capital management were made. This paper argues that the economic capital management of China’s city commercial banks has some problem. For example, a comprehensive risk management system has not been established yet, lack of comprehensive information systems support and lack of professional personnel and other issues. Management methods should be improved, and scientific management organization system, personnel training and technical conditions for the optimization and other aspects to be improved.