Research On Risk Management Of Bank OBSA

In the environment of incessant financial innovation, traditional banking business market share in our country declined and the interest spread of deposit and loans gradually narrowed, many banks then vigorously develop off-balance sheet activities (OBSA). OBSA influence on banks is getting bigger and bigger. From bank OBSA risk management, this article made explanations of all kinds of risks related to bank OBSA, risks involved mainly included: credit risk, market risk, operational risk, liquidity risk, financing risk, settlement risk, information risk, country risk, legal risk, reputation risk, and so on. This article contrarily made analysis of all risks of OBSA, which is related to products currently sold in the financial markets in our country.Risk measurement is the core foundation of refinement of banking risk management. There are both objective and subjective reasons about risk measurement technique backwardness of OBSA of the financial industry in our country. On one hand, the external environment, like credit environment, data information environment, and so on, to some extent, restricted the development of risk measurement techniques, on the other hand, banks in our country over the years have been gracefully "eating" the interest spread of deposit and loans, making banks lack of the original driving force of refinement management. In recent years, with the gradual opening of the financial market in our country and the fierce profit-driven campaigns, the interest spread of deposit and loan business is getting narrowed, forcing major banks vigorously developing OBSA. Risk of OBSA, to some extent, is higher than that of on-balance sheet business. The risk measurement of OBSA refinement management is more important.Current regulatory system about calculation and disclosure requirements for bank OBSA in our country is more general, which is difficult to measure, combined with researches on bank OBSA of predecessors and scholars, this article from different angles built different risk measurement models, presenting several risk measurement methods on the specific accounting calculation. The econometric models built included:"comprehensive equity" model, off-balance sheet shadow provision counting and drawing model, expected OBSA impairment method."Comprehensive equity" model mainly introduces "comprehensive equity "concept, according to "ownership equity" original meaning, ownership equity is:owners as a proportion of their capital contribution share enterprise profits and bear business risks, proposing hidden enterprise business risks in off-balance sheet business to form "off-balance sheet equity", off-balance sheet equity should also be identified, measured and concerned. Off-balance sheet equity is the overall measurement of OBSA risks.Off-balance sheet shadow provision counting and drawing model mainly expands the provision counting and drawing scope, aiming at OBSA risk, making provision for corresponding off-balance sheet counting and drawing as to increase enterprise provision coverage ratio and to improve bank risk-resisting capability-Expected OBSA impairment method was from International Accounting Reporting Standards No.9----financial instruments:impairment (draft for soliciting opinions) published by the International Accounting Standards Board (IASB) in March 2013, aiming at off-balance sheet business, it is mainly on forward-looking estimate of the risk and to confirm possible impairment. It reduces the threshold of the impairment preparation under existing standards, advocating impairment confirmation for risks possibly occurred in OBSA.This article also made prospects of bank OBSA risk management in our country and made some management recommendations. Proposals included:firstly, to strengthen the bank’s own OBSA risk management capacity, not only requiring the establishment of modern bank OBSA risk management system, but also enhancing bank information system construction, paying more attention to cultivating risk management cultural ideas in inner enterprise; secondly, to improve the service level of financial intermediation; thirdly, to further strengthen financial supervision. Only strengthening management in many aspects, could comprehensive risk management system be formed and bank OBSA risk effectively controlled.