The Research & Management On Operational Risk At The Bank Of China Yiyang Branch

With the in-depth study of operational risk of commercial banks and the reinforcement in the importance of operational risk of commercial banking by Basel II , the major commercial banks has given high priority to operational risk. With rapid development of China's banking industry in recent years, frequently happened deregulation and fraud cases and operation issues made bank a great loss. For operational risk management problems is very prominent, deepen research is needed urgently. Meanwhile, the problems of operational risk management in grass-roots commercial banks are outstanding and characteristic. Therefore, operational risk management aiming at grass-roots commercial banks has assumed great significance.In this paper, the author chose Bank of China Yiyang Branch as a sample for investigate on the reasons which made risk come into being and raised management measures for risk control. Firstly, it reviewed the commercial banking operational risk research results coming from domestic and overseas scholars and briefed risk's connotations, classifications. Then, it raised the issues according to the analysis on past 3-year operation practices of Bank of China Yiyang Branch. The analysis includes internal and external causes generating operating risks. The author comes the conclusion that the main reason accounts for operational risk of Bank of China Yiyang Branch is the imperfect of internal management from aspects, i.e. management procedures, management instrument and internal control mechanism. This paper based on internal management perspective and the main aspects of reasons accounts for operational risk, proposed feasible solutions on operational risk management. Bank of China Yiyang Branch can draw lessons from operational risk management experiences from four overseas advanced banks .There are some feasible solutions on operational risk management, including operation procedure review, operational risk management tools innovation and economic capital management system reinforcement.