Analysis Of China Merchants Bank’s Risk Management System

The finance industry is the core of modern economy, and banks are the backbone of the financial industry. Comprehensive risk management system helps improve commercial banks’competitiveness and profitability. Comprehensive risk management is not only the requirement of CBRS but also the basis for the interests of the shareholders, management, employees and customers. It also ensures the banking industry’s the core role in the economy.This article begins by reviewing domestic and international basic theories of risk management. Four stages of risk management, evolution of Basel Accord, and development of domestic and international risk management regulation systems are introduced. Then the China Merchants Bank is taken as an example and its current risk management structure and the processes are analyzed. Further, based on CBRS’s regulatory documents named Joint-stock commercial bank risk rating system and commercial bank’s core indicators for the risk management, the risk management performance of CMB is analyzed in terms of the risk level, risk migration and risk compensation, with reference of China Minsheng Bank and Industrial Bank’s data. Finally, suggestions are given to the risk management system of CMB about internal environment, risk identification and assessment, communication, feedback, and supervision etc. The results will probably help commercial banks to improve their risk management and control the risks more effectively, which is where its significance lies in.