Income Model Based On Small And Medium Commercial Banks Operational Risk Measure And Analysis

The operational risk of commercial bank is accompanied by the emergence of commercial banks. With the rapid development of modern economy, the commercial banks expand in a deep degree. Gradually, the commercial banks become the core section for the economic operation because they have something to do with each link of the economic operation. Therefore, the operating risk of commercial banks has more and more impaction on the economic operation. But the operation risk of commercial banks hadn’t got enough attention until1980s. In recent years, with the deepening reform of financial system, the management problems in commercial banks operational risk gradually emerged, and a series of great influence cases were exposed, such as the case happened in Bank of China Kaiping branch of Guangdong, In20101206large financial ticket forgery case, the case of leading official lose happened in the Agricultural Bank of China, Yaosai branch of Jiangyin city, and so on. These cases not only seriously damaged the normal financial order, but also had a great negative impact on the bank industry. So the study on the operating risk of commercial banks becomes a hot issue in academic research.Operation risk, credit risk and market risk are listed as the main risks for the financial institutions in "the new Basel Capital Accord" released in2004. Operational risk management has been incorporated into the new management concept and management protocol. For example, The New Capital Accord explicitly requires that the bank supervision for its capital adequacy ratio must accurately reflect the business operation risk status. In China, the operation risk management in bank industry faces more severe situation because the operational risk management of commercial banks stated later and the small and medium commercial banks developed so quickly.In this paper, we take the operating conditions of small and medium-sized commercial banks as the analysis object. Through establishing income model and carrying on the empirical analysis, we try to explore the path and measures of small and medium-sized commercial banks operational risk management under the current situation in order to provide theoretical basis for improving the ability of operational risk management of small and medium sized commercial banks and provide reference for the banking industry to promote the healthy and stable development.There are six parts in the paper. The first part is the introduction, which mainly introduces the research background, research significance and the research content and method, through the use of questions to lay the foundation of later research. The second part is the literature review, which analysis the relevant research mainly from the content, the measurement and management of operational risk. The third part makes use of game model on commercial bank operational riskmechanism were analyzed.The forth part analysises the system of operational risk using game theory model. The fifth part is to describe the measurement method of the commercial banks, which aims to choose a suitable method that could provide the basis for the empirical analysis in the research through the related methods collection and compare. The sixth part is the empirical analysis. In this part, we adopt income model, design relevant variables, select the appropriate econometric model, analysis through econometrics method, calculate the operational risk of the banks. Comparing the operation risk of commercial banks, the risk management level of most listed commercial banks is analogous. Their operational risk exposure within the controllable which ranges from7%to13%. However, the operational risk of Huaxia Bank’s exposure is up to35%. Its operation risk management level and the core capital should be improved immediately. The sixth part draws the conclusion and puts forward policy suggestions. The studies argue that we should prevent the occurrence and spread of operational risk depending on strengthening internal management, improving external environment of bank operational risk and using means such as insurance, outsourcing, mutual fund, operating risk securitization et al.