Application Of PIC Classification Method In The Internal Control Of Commercial Banks

Commercial banks play an important role in China’s financial system. Security operation and stable development of the banking play a decisive role, which relationship with the safety of the country’s financial environment and the sustainable development of national economy. Internal control is the key to the security operation and stable development of the banking industry. With the theory and practice’s progress of the world’s banking internal control, internal control and risk management of Chinese banks has improved continuously. However, financial cases of domestic banking break out frequently in recent years, it’s often seen that various risk reports on internal control failure resulting, all these expose the lack of internal control.In the face of the fierce competition and the increasingly complex risk, to carry out the internal control is a priority, and to improve internal control is an irresistible trend. PIC classification method is a classification method of important degree of commercial banks’risk-problems, which is based on the3D analysis:risk possibility, risk influence and its cause. It aims to discuss the classified governance of the risk-problems, that the internal control of commercial banks are facing. Consequently, it has the vital significance to strengthening the internal control of commercial banks.The first chapter presents the topic background, the research significance, review of research at home and abroad, and so on. The second chapter expounds regulations to banks’internal control and risk management by regulators, and related practices of domestic banks. The third chapter introduces the theoretical basis of the research Risk Matrix Method. On the basis of the theory, the fourth chapter shows an empirical study of the status and the main causes of commercial banks’ risk-problems in China, thus structures PIC classification method. The fifth chapter elaborates the application scope of the method, establishes a simple and practical evaluation stable, gives typical examples of its using, and puts forward the related proposals.