Small And Medium-sized Commercial Banks Operating Risk Management Research

As our finance system reformed continuously thorough, we transformed commercial banks into stock system steadily. Meanwhile, the financial products were changing rapidly and the market competition was also getting tougher, so the banks had to face the new challenges come from operational risk management, as they controlled the traditional risk. In2005, China Banking Regulatory Commission (CBRC) informed all Chinese banks and other financial institutions, to make great efforts on the operational risk control. In the following years, CBRC published some important documents to strengthen the operational risk management and perfect corporation governance in commercial banks, such as A Guide to the Operational Risk Management in Commercial Bank,A Guide to the IT Risk Management in Commercial Bank, Guidance to the Reputational Risk Management in Commercial Bank, Instruction of the Liquidity Risk Management in Commercial Bank. BCBS summed up the practical experience of operational risk management and supervision, then published A Good Practice on the Operational Risk Management and Supervision on Dec.102012.Regarding the importance of operational risk management in banks’ daily work, this thesis will introduce the substance of operational risk management in small and medium-sized commercial banks, and define its scope. First elaborated, The New Basel Capital Accord on the banking operations risk management requirements and their practical significance for our small and medium-sized Commercial Bank operational risk management. Secondly,let’s take Kunshan Rural Commercial Bank (KRCB) as an example, analyse the current situation about the framework, department responsibility and daily operational risk management, and discover the main problem, then find out why it’s lag behind. Finally, we’ll give out suggestions on improving the operational risk management in the small and medium-sized commercial banks, through swifting the thinking, strengthen the external supervision, and perfect the risk control system&assessment model. We’ll analyse the good importance of the procession in improving the operational risk management, through the method of work flow re-structured. Banking process reengineering will be introduced in this chapter. And we’ll analyse the process banks’ vital function in banking operational risk management.