Research On The Relationship Between Violation Punishment And Internal Control Of Urban Commercial Banks

Since the 2008 financial crisis,strengthening internal control has always been a topic of financial regulators around the world.2017 is the year of strong supervision in Chinese financial systerm,and nearly 40% of the fines issued by the banking regulatory system are about internal control.On the one hand,whether the regulators' determination of the amount of punishment for violations is "well-founded" ? Will the different degrees of internal control construction,internal governance,operating conditions and the feature of the infraction cases of the infraction subject lead to the different punishments of the regulatory authorities for the infraction? Is the penalty "one size fits all" or "differentiated law enforcement" ? Is the frequency of violations related to these factors? On the other hand,there are many research results on listed commercial Banks,but few on city commercial banks.How to design relevant indicators for the internal control of urban commercial Banks? All the above questions are worth exploring and studying.This article,through the theoretical research,literature research and empirical analysis,designs the internal control evaluation index system,and uses entropy method to calculate each index weight and analyse the amount of internal control violation,the frequency of internal control violation,the construction of internal control,the management situation,the operation situation,the situation of external audit and the nature of violations of city commercial Banks had internal control violations in 2017 by regression analysis respectively.And draw the following conclusions: 1.There is a significant linear relationship between the pricing of fines for internal control violations by regulatory authorities and the construction of internal control of urban commercial Banks and the illegal nature of cases.At the same time,the bank's reputation is taken into account,but the bank's governance and operation are not taken into account.So the pricing basis of fine is not perfect.2.There is no significant linear relationship between the frequency of violations of the internal control of the offending city commercial bank and a certain index,which may be due to the randomness and subjectivity of the internal control violations.This paper also puts forward some suggestions on the punishment basis of internal control,evaluation index design and internal control construction of urban commercial Banks.This paper starts from the pricing of penalty amount and the frequency of violations.The research on pricing is helpful for the regulatory authorities to realize the "evidence of punishment" and for the bank management to make targeted improvements to the internal control system to reduce the cost of penalty.The research on the frequency of violations is also helpful for the management to strengthen the internal control construction.Therefore,it has certain practical significance.In addition,this paper sorts out the relevant data by reading the annual report,and establishes the internal control evaluation index and regression model of urban commercial Banks,which is of certain reference significance for the subsequent research.