The Risk Management And Innovation Of The Intermediate Business In Chinese Banks

The intermediary business of commercial banks is to provide financial service byusing customer resources. It gives full play to their own advantages and basically donot need to spend their own funds. The banking industry provides services asoutsiders. The intermediary business relies on the reputation of the banks as operatingcapital, which is different from traditional businesses which rely on bank credit funds.Begin with the analysis of the development of commercial banks’ intermediarybusiness, this article introduced the current problems of the intermediary business andfound the significant difference between the intermediary business of westerncountries and our country. By understanding this difference, we can learn experiencefrom the development of western countries’ intermediary business and help Chinesebanks with their innovation and development. Combining with China’s financialmarket environment, the article proposes the importance of the development ofintermediary business and innovation, and intermediary business is the vital turningpoint and profit improvement of for China’s bank. The article aimed to research howbanks innovative intermediary business and how to control and manage the riskcoming with the innovation.To manage the risk caused by innovation, the article first judged the possible risks byanalyzing experience and selected the appropriate indicators to establish a riskmanagement system. Next, by choosing11Chinese listed commercial banks andcalculating the various types of indicators included in the index system, usingstatistical methods of factor analysis, the article analyzed all types of risk of the banksand finally proposed risk innovative proposals. Through all these researches onintermediary business, this article tried to enhance the innovation of intermediarybusiness and broaden banking service variety, while currently China’s banks only relyon interest income of capitals. As intermediary business can provide high profit, thebanks should pay more attention to its development.