SD Branch Of China Construction Bank Operational Risk Management Research

In accordance with China financial advancement of the financial regulatory authorities, the first batch of commercial banks formally launched "International Convergence of Capital Measurement and Capital Standards:A Revised Framework" ('The New Basel Capital Accord') in 2010. The operational risk formally became one important part of risk regulation of China commercial banks. As China Construction Bank, one of the four major commercial banks its operational risk management is a representative. Shandong Branch (hereinafter referred to as the SD branch) of China Construction Bank as the integrated management of institutions, with the institutional level, more than the number of personnel, operational range, the larger the relative size of the business features, both locally and within the system has an important influence.Practice-based research, combined with years of experience in internal audit work, the author seeks to SD through research branch of China Construction Bank's operational risk management level to provide reference, and meanwhile it provided some references on the operational risk management to SD branch and other domestic commercial banks.Firstly, the author made the relevant literature and summarized on the theory of operational risk. Based on COSO "Enterprise Risk Management" theory, combining with China Construction Bank, Shandong Branch (hereinafter referred to as the SD branch) business reality, the author analyzed the operational risk management of SD branch. SD branch operational risk management policies and systems, management structure, management processes and operational risk management environment are leading other banks in the domestic industry, but there are still many problems. Such as the irrational set in operational risk management framework results the operational risk management of SD branch coverage is inadequate. The independent operational risk management at the grassroots level institutions is difficult to guarantee. In operational risk management processes, the identification of operational risk is still focused on identifying operational risk event itself, SD branch do not pay enough attention on the logical relationship of reason to events to results. The path of risk reporting operations is unreasonable. In terms of operational risk management environment, the system is decentralizing and SD branch does not pay enough attention to operational risk culture and the staff (especially junior staff) is lack a deep understanding of operational risk culture. The staff quality is needed to be improved and the internal control system is not sound. The phenomenon of deficiencies in the internal control coexists with the dispersion. Based on the operational risk management problems of SD branch, the author proposed the corresponding improvement program and relevant supporting measures in its operational risk management framework, processes, and environment. Such as, in the SD branch operational risk management organizational structure, the author suggests setting up independent operational risk manager in grass-roots level branches and various business units. The operational risk manager regular or irregular reports to upper management agencies. In the process aspects, to lay the foundation of the advanced measurement approach, the author proposed SD branch to strengthen the efforts on the loss data collection. The author also suggested SD branch use a clear path to risk reporting. In the environment of operational risk, the author proposed improving training system and transferring training center. The author also suggested improving staff quality, with particular attention to the ideological and moral quality of the staff, thereby reducing the probability of the occurrence of moral hazard. The author suggested ordering of the system to form the system documentation and implement efforts to strengthen. The author also proposed to strengthen the functions of the internal audit department as the third line of defense against operational risk.