The Study For Economic Capital Allocation Model Modification In Bank Of China Jilin Branch

With the new Basel agreement’s promoting and implementing in application ofnternational financial regulation, China’s domestic banking regulation is in constanthange, especially in early2013, Banking Regulatory Bureau released Measures for theanagement of commercial Banks’ capital, which have a strong impact on measurementethods and means of commercial bank capital management. In order to adapt theanking Regulatory Bureau’ new regulatory policy, Bank of China head officentroduces a series of capital management policies to achieve endogenous dynamicechanism which allows a dynamic management on capital resources. That’s why Jilinranch original fixed quota type capital configuration mode can’t meet the requirementsf new management style. How to adapt Banking Regulatory Bureau and Head Office’sew requirement, improve capital allocation model, and enhance usage efficiency haveecome an important topic in Bank of China Jilin Branch.Economic capital management which is based on capital’s scarcity and high-cost natureas benefit constraint and risk constraint. It is used for resisting unexpected loss. Due to thecarcity of capital, limited capital resources must be used to the chain which would increase theank value. The paper is devoted to search the problems existing in current management modend study the causes of these problems by analyzing economic capital allocation model of Bankf China Jilin Branch whose current management situation would scale new heights.The paper comes up with the research background, significance and method first;hen estate the theoretical basis of internal and external regulation; thirdly, list out theroblems existing in current economic capital allocation model from Jilin Branch’sapital management historical development and current situation; as last, analyze theefective products. Based on that, combined with flexible capital allocation guided byuantitative change and capital risk weight guided by qualitative change,wo-dimensional economic capital allocation and control mode come into being via thenalysis and improvement. Meanwhile, performance indicator system based on theapital allocation model come up. For purpose of finding a way to improve current capital allocation model efficientpath, play a good role of capital management, increase efficiency of capital using, andachieve maximum economic value added value, the paper studies capital allocation ofBank of China Jilin Branch in combination with the practical situations and problemsvia financial management and capital management theories and methods etc.Bank of China Jilin Branch’s capital allocation model improvement takescombining qualitative analysis with quantitative analysis, investigation and experiencesummary methods to seek a set of capital allocation model which is suitable for JilinBranch’s current operating state to offer a effective help.