Researche On Reputation Risk Of Commercial Bank

After the outbreak of the global financial crisis, commercial banks’ survivalcrisis intensified, reputational risk crisis has become an important indicator inevaluating the problem of the sustainable development of the banks. As early as in1988, the Basel Committee issued the "Basel Accord" bank credit risk regulatorycapital framework, but it did not get enough attention. Then, in2004, the new “BaselCapital Accord" has been amended and the reputational risk has been one of the eightrisks of commercial banks. Reputational risk management started even later in China.In2009, China Banking Regulatory Commission released guidelines on reputationalrisk management of commercial banks. The guidelines explicitly pointed out thatreputational risk management must be incorporated in the system of governance andrisk management of commercial banks, aims to guide commercial banks in effectivelymanaging reputation risk and perfectly establishing the comprehensive riskmanagement system. In June2012, the CBRC promulgated the capital managementof commercial banks (trial) which clearly put reputational risk in the second place ofthe main risks and required the banks to evaluate this risk regularly. The reputationalrisk has become one of the most important indexes in evaluating the managementsituation of the banks.This paper takes the reputation risk of F Bank as the research object, combinedwith the relevant results of previous studies, using literature research method,comparative research method, theoretical analysis method and other research methods.And this paper discusses the problem from the following four aspects: the concept, characteristics, form of expression of F Bank; the existing reputationalrisk problems of F Bank; the necessity to strengthen the reputation of F Bank and thecountermeasures for strengthening the management of reputation risk of F Bank.The reputation risk management in China is not yet perfect, and the managementsystem is still not sound. The reputation risk awareness of the bank employees fromthe top to the bottom is relatively weak, and the effective risk prevention capability isnot possessed as well. Strengthening the reputational risk management of the F Bankis conducive to the development of its own. Our country has entered a new stage ofthe reputational competition currently, and we must strengthen the reputation riskmanagement, enhance the brand image, improve the market competitiveness, set up acomprehensive and effective risk management mechanism, so that the managementdepartment and business department can manage reputational risk together. Buildingthe reputation risk awareness and the well-organized operating mode are vital inmaintaining sustained and healthy development momentum. The establishment of aneffective reputation risk early-warning mechanisms can warn the banks in solving theproblems before the risk outbreaks and can also reduce the costs the risks may bring.Bank is the place operating capital and credit, so the support from customers and theconfidence of the community are indispensable for the development and stability ofthe F Bank..It presents the measures to improve the reputation risk management of F Bankat the end of this paper. Reputation risk management includes reputation riskmanagement before outbreak of the early-warning, reputation risk management at theoutbreak of the response, reputation risk management in the wake of the outbreak,and the communication between the regulatory authorities, the media, and thecustomers. It is a long-term mechanism for the banks in preventing reputation crisis.First, the government should establish a sound reputation risk management system toadjust reputation risk management organization structure, establish a suitable structure for the conditions of our country’s management, and develop a viable systemof management. The banks should not only focus on reputational risk emergencies ofdisposal but also pay attention to the day-to-day management of reputational risk,establish and improve the management processes, fully contain the reputational riskidentification, measurement, and detection and reputation risk of sustained-releaseprocess. At the same time, we must launch good reputation risk evaluationmechanisms in decision-making, implementation of the program, and technicalparameters of the evaluation, economic efficiency, and social impact assessment.Second, to establish effective communication mechanisms, strengthen mediarelations and improve the monitoring of public opinion aspects, handling mediarelations, seize the media trends, understand the needs of media, communicate withthe media actively, seek opportunities for cooperation in the risk events.When meeting risk events, make sure that the opinion of the public and theorganization is consistent in order to reduce the adverse influence of reputation crisis.The banks should strengthen the risk prevention ability before the reputation riskoccurs, improve the reputation risk prevention and management measures, andgradually establish a risk-monitoring system, advance the enterprise crisismanagement, strive to prevent the potential risk, ensure the banks start the emergencyresponse system in the first time.The banks should build employees’awareness of reputational risk again,Let "reputational risk is everybody’s business" bear in mind, so that every employeecan recognize the importance and urgency of strengthening the management ofreputational risk.