Empirical Analysis On Operational Risk Of China’s Listed Commercial Banks

With the ongoing financial market reform and the accelerated pace of opening tothe outside world, the innovation of financial products, the improvement of the degreeof financial liberalization and the update of financial technology makes financialactivities more complicated. In recent years, China’s operational risk loss casesfrequently outbreaks, shocking loss cases brought huge losses to the bank, andshowing a rising trend, this gives our banking and regulatory authorities alarmagain.Throughout the research of domestic commercial banks operational risk metrics,basically reference to the contents of the New Basel Capital Accord, blindly introducethe Advanced Measurement method, and not combined with the actual situation andthe particularity of China’s banking industry development. In this background,combined with the research of the former scholars, by analyzing the status andcharacteristics of China’s commercial banks operational risk, I try to choose suitableincome model for the current to measure the size of China’s commercial banksoperational risk. The empirical results show that: the level of China’s commercialbanks operational risk within the controllable range. By respectively measuring andcomparatively analyzing of the three categories commercial bank, the results showthat: joint-stock commercial bank’s operational risk is greater than the state-ownedbanks, state-owned banks is greater than the city commercial banks. Therefore, on thebasis of the research conclusions I give following recommendations: Firstly,we canstrengthen the construction of operational risk awareness culture in the bankingsystem; secondly, we should improve the internal control mechanisms; Thirdly, wecan try to increase investment and use of advanced equipment; Fourthly, we shouldfocus on preventing the occurrence of the joint-stock commercial banks operationalrisk case; Fifthly, build a database of loss and continue to strengthen the managementof Operational Risk. Sixthly, manage the estimation methods and measurement model.