A Research On The Cross-regional Financial Risk Management And Control Of The City Commercial Banks

After ten years of development, the city commercial banks have become an important part of China’s banking industry. For those large and medium-sized city commercial banks have to break the traditional single-city business model and develop cross-regional business. And cross-regional development can help the city commercial banks to achieve economies of scale, reduce the regional risk as well as expand brand influence, but this process is often accompanied by a variety of risks. If the city commercial banks can not have a good understanding and take effective control of the risks during their cross-regional development, they will ultimately face financial losses or even bankruptcy, so the cross-regional financial risk management and control of the city commercial banks is an urgent research topic at present.The cross-regional business of city commercial banks starts to be popular in recent years, and there are only a few study on cross-regional financial risk. This paper focuses on identification and control of cross-regional financial risk. Based on a qualitative analysis, this paper, taking C bank as an example, analyzes its cross-regional financial risk management status, and focuses on revealing the case bank’s current weakness in cross-regional financial risk control and proposing corresponding suggestions.The main contributions of this paper are as follows::(1) Define and identify the cross-regional financial risk on both process-based and incremental risk perspectives; Based on a qualitative analysis of the sources and characteristics of the cross-regional financial risks, propose a theory framework for the management and control of cross-regional financial risk, which emphasizes strategic orientation, proper authorization, and good internal control;(2) Use a case study approach to have a detailed analysis of the case bank’s cross-regional financial risk, pointing out its current weakness in financial risk control during cross-regional development and making targeted recommendations, to provide useful reference for other city commercial banks in their cross-regional risk management and control.