Research On Economic Capital Management System Of Commercial Bank

As the creation of the Basel agreement, the concept of capital constraints get laythe foundation position in the banking industry, which not only became the new valueof the banking coordinates, at the same time, also prompted banking risk managementtheory to further improve and control the risk of tool to expand by a wide margin. Asa result, most of the commercial Banks at home and abroad to establish a risk-benefit restriction mechanism for a common choice, and this mechanism is the core ofthe capital. At this point, the economic capital boarded the historical stage andbecome the core of commercial bank’s risk and value management. With thecontinuous development of economic capital, at present, international banking ofgm’s most effective risk management system is the economic capital managementsystem.In2010, the draft of Basel Agreement III was proposed in Switzerland on theground of Lehman Brothers bankrupt in2008, which led to a chain reactions–subprime crisis in America and the global economic crisis. In2011Korea G20Summit, the Basel Agreement was approved. In June,2013, the new clauses in theAgreement were issued. The most distinguishing characteristic is to extend thedefinition of current assets and the implementary date. The Basel Agreement sets agood regulatory example in the banking industry all over the world. There must be anew adjustment on the norm of international financial regulation and the restructuringof regulation norm, which will probably greatly impact the banking operating patternand developing strategy.Chinese economic restructuring is in the critical period and changes will takeplace on the banking operation regulation. It is necessary to adopt active copingstrategy, considering the Basel Agreement being approve and the coming substantial changes on international banking regulation norms. Before that, China BankingRegulatory Commission has taken new banking regulation strategies accordingly.They’re Capital adequacy rate, Capital Provision rate, Capital leverage and Capitalflowing rate. These strategies will necessarily lead to the changes on the bankingcapital operation and risk administrative patterns. Anyway, the Basel Agreement III isnot implemented thoroughly, and the Basel Agreement II is still play an importantrole, so the focus in the thesis is the current agreement regulatory norm.With the rapid development of our economy, our country commercial bankassets also increase quickly, along with the expansion of assets, the risk is too big. Asone of the big four state-owned Banks, the agricultural bank of China started in2005will be one of the economic capital management concepts in the daily management ofthe bank, and gradually establish economic capital management system, with thedeepening of the practice, this system further improve and deepen, form capitalconfiguration, measurement, assessment and integrity of the content such as loanpricing system, and the system from the start of the assessment of profit as theobjective to target value appraisal. Since2005, the agricultural bank of China’seconomic capital management system, and gradually from the beginning ofimplementation of the headquarters to the implementation of provincial branch,however, due to the economic system and the influence of the controllable factorssuch as market environment, so far, the agricultural bank of China’s economic capitalmanagement system is not fully developed, and the some of the less developed areashasn’t begun to implement the secondary branch. To make the economic capitalmanagement, the biggest economic effect, make the idea of economic capitalmanagement in every corner, to the bank to carry out the process of operation,therefore, the agricultural bank of China is stepping up its development economiccapital management, in order to a sharp rise in the value creation ability.Beginning in2009, F branch of agricultural bank of China began to introducethe economic capital management. To avoid just through asset and credit scale andother simple mathematical assessment model F branch business management state ofblindness, according to the actual of F branch implementing economic capitalmanagement, based on the added value of economic return on capital and economic perspective, these two indicators as the core of bank management benefit evaluationindexes, and both as the main line, analysis the specific situation of F branch of thebusiness from the economic cost of capital and profit analyzed the creation ability,clear bank in business management problems that exist in the process, put forward theconcrete policy Suggestions to solve the problem. In this paper, the research in orderto promote further do F branch of economic capital management, play a role ofeconomic capital in the process of value creation, the forerunner, prompting F branchbusiness management pattern of the development and transformation, at the sametime, this in the realization of connotative development of banking business, thebusiness management ability and constantly improve the level of value creation hasimportant practical significance.The organization of this article mainly includes five chapters:The first chapter, introduction. In this chapter, mainly introduced in this paper,the research background, research significance, the research both at home and abroad,and the structure of the thesisThe second chapter, the commercial bank economic capital management ofrelated theory. In this chapter, first introduced the relevant theories of economiccapital management, including the overview of economic capital and economiccapital management; Next to the old and new Basel are introduced; Finally introducesthe added value of economic return on capital theory and economic theory.The third chapter, the practice of domestic and foreign commercial bankeconomic capital management analysis. In this chapter, first introduced the presentsituation of the foreign commercial bank economic capital management, and sums upthe implementation of foreign commercial bank economic capital managementexperience on our country’s enlightenment; Secondly introduces the present situationof domestic commercial bank economic capital management, state-owned Banks andjoint-stock Banks are introduced separately the current situation of the economiccapital management, and summarizes the domestic commercial Banks in theeconomic capital management problems that exist in the process.The fourth chapter, F branch of agricultural bank of China the economic capitalmanagement analysis of the effect and existing problems. This chapter firstly introduces the F branch of agricultural bank of China after implementing economiccapital management effect analysis, and then introduces the F branch of agriculturalbank of China’s implementation of the present situation of the economic capitalmanagement, and summarizes the problems existing in the implementation process.The fifth chapter, the perfect F branch of agricultural bank of China theeconomic capital management countermeasures and Suggestions. Analysis of thischapter for the last chapter sums up the existing problems, the improvement of thecorresponding countermeasures and Suggestions are put forward.