Research On Application Optimization Of RAROC Model In Risk Management Of Z Bank XZ Branch

With the continuous development and change of the international financial environment,RAROC(Risk-Adjusted Return of on Capital)has been widely used as a core technical tool for economic capital management.Following the international financial reforms,the China Banking Regulatory Commission revised and promulgated the “Capital Management Measures for Commercial Banks(Trial)” in June 2012.Domestic commercial banks officially entered the era of comprehensive risk management with economic capital management as the core.The economic capital management of domestic commercial banks is still at a relatively early stage.In recent years,in the face of new internal and external situations,domestic commercial banks have learned from the experience of advanced international banks and began to actively implement capital management under Basel? in accordance with their own circumstances.The RAROC model,which comprehensively evaluates the profitability and risk management capabilities of banks,has become a risk management technology introduced by domestic banks.Z Bank implemented the use of RAROC technical indicators in 2007 and has achieved certain results at the head office level and the provincial bank level in recent years.However,there are still some problems in the practice of applying RAROC for risk management at the grassroots branch level.Based on the actual situation of XZ Branch,a second-level branch of Z Bank,this paper analyzes the problems in using RAROC in the branch's pre-loan,on-loan,and loan-after risk management work.The research found that in terms of risk management philosophy,refined management of the entire process of risk management,and compliance requirements for risk management work,optimization needs to be strengthened.The thesis also proposes that that human resources and organizational aspects are used as guarantees and performance assessment as the endogenous driving force in order to comprehensively improve the application strength and application level of RAROC technology,thereby enhancing the overall risk management level and operating performance of the branch.With the popularization and wide application of the RAROC model,the RAROC application optimization scheme and corresponding safeguard measures proposed in this paper can be used for banks with similar problems and banks that have not yet implemented this technology,especially for grassroots branches as references.