Trial Discussion About How To Establish The System Of The Enterprise-Wide Risk Management In The Commercial Bank In Our Country

The modern commercial bank faces various operating risks. It is necessary for the governors in the bank to understand these risks and to insure that they are appropriately measured and managed. Risk management ability has become a significant component of the integrated competitive power of a bank. Since China's banking sector has not been in commercialized process long enough, many problems occurred. One of them is the rather high ratio of banks'non-performing loan (NPL), which becomes a heavy burden for banks when they are developing. It also reflects problem in risk management, that is, the relatively low ability of the whole risk management. Commercial banks are inevitably required to improve their risk management so as to keep a continuous, healthy and fast development. Therefore they are also obliged to identify, evaluate and manage the risks efficiently. As a result, the risk management pattern should be transferred to the enterprise-wide risk management from credit risks management originally.In recent years, it is highly required for banking risk management to improve itself by deepening of internationalization of the financial market and the transformation of international banking sectors. The publicity of the New Basel Capital Accord (Basel II) stands for the banking risk management entering into the new era of enterprise-wide risk management. The official implementation of Basel II greatly impacted on the changes of risk management in China's banking sector, especially in commercial banks. Basel II encourages banks to put enterprise-wide risk management into practice. Many valuable explorations have also been taken into force as to improve the risk evaluation technology and to reestablish organizational structure for risk management. Nevertheless, the systematism for enterprise-wide risk management is still not strong enough to guide the specific practice of risk management for commercial banks. Besides, there are still many holdbacks for Chinese commercial banks to fully implement Basel II. To eliminate those holdbacks, banks'reforming has to be taken in-phase. This article tends to integrate the COSO Report of U.S. and Basel II, together with specific practice of China's banks, so as to bring forward the author's viewpoint on how to set up the enterprise-wide risk management system for China's commercial banks. Refers to the current status of risk management in commercial banks, the article points out six main holdbacks that commercial banks are facing with when the enterprise-wide risk management system is setting up. The solutions are also brought forward from eight aspects as to expatiate how to construct the enterprise-wide risk management in China.