Research On Internal Control Of The State-owned Commercial Banks Of China

With the continually deepening of the globalization and liberalization of world finance, the international financial market has been increasingly unsettled, which causes the high-rate occurrence of financial crisis of global economy. As a key method of advancing core competence of commercial banks, effective internal control plays an important role in ensuring the steady operation of banking system. It has become an urgently needed research topic of the whole world, especially the developing countries that how to improve the perfect financial security system, to prevent financial risks and to ensure financial security. Therefore, it will be a very realistic project and long-term task to understand and grasp the uncertainty faced by the state-owned commercial banks during development correctly and to take effective measures to build complete, effective and reasonable internal control system.This article takes the internal control of the state-owned commercial banks as main research object. By studying the internal control theory in the world today and the commercial banks internal control evaluation theory, this paper discusses the concept of the commercial banks’ internal control and its research status at home and abroad. Aiming at the problems of unreasonable organizational structures, disobeying of regulations, cognitive deviation and imperfection of personnel control mechanism of the internal control of the state-owned commercial banks, this article analyses the causes of their problems and puts forward the counter measures thoughts on improving the internal control system of commercial banks. According to these thoughts and based on analyzing present situation, this article also provides countermeasures for the construction of internal control of Bank of China as well.Through research, this article holds that the problems of internal control of the state-owned commercial banks of China mainly includes:unreasonable organizational structures and weak control of the organization, disobeying of regulations, operation against rules, and failing in implementing systems, cognitive deviation and imperfection of personnel control mechanism, etc. While internal control problems mainly caused by two aspects of subjective and objective reasons. Objective reason is that the existing state-owned commercial banks of China is changed from the past professional bank, and their internal control systems can hardly be implemented influenced by the traditional economic system. Subjective reason is that parts of bank managers are still unable to recognize the inner dialectical relationship between internal control management and business development correctly. At the same time, the employees’low overall quality and lacking of sense of responsibility makes the poor effect of the internal control system implementation. At last, this article argues that to perfect the internal control of commercial banks of China should pay attention to the followings: perfect the corporate governance structure and strengthen the bank management supervision; set up audit system and improve the system of professional supervision and inspection; build effective information systems and smooth information communication channels; allocate human resources rationally and optimize the structure of human; coordinate internal and external relations properly and create good both internal and external environment.The effectiveness of internal control of the state-owned commercial banks has the important influence on the financial stability and sustainable development of China, which concerns the political and economic security of our country. It is the objective request to establish and improve the internal control to cultivate bank credit, enhance competitiveness and guard against financial risk. Therefore, improving internal control is an important content of the reform and development of banks of China. This article revolves the current situation and existing problems of internal control mechanism of commercial banks of China, and puts forward corresponding solution and way of improving, hoping to contribute to the safe and stable operation of commercial bank system of our country.