The Analysis Of Operational Risk Based On The System Of Home Bank-Foreign Branch Of Multinational Banks

According to the analysis of the financial scandals of multinational banks, we find that one of the most important elements resulting to losses or bankruptcy is the less communication among bank and its branches under the system of"home bank-foreign branches". The kind of operational risk focused in this paper is that the risk resulting from the management uselessness caused by the negligence or mistake among this system mentioned above. It analyzes the reason and then uses Delta-EVT model to build the risk measurement based on five risk factors and finally puts forward the management framework.The first section is the preface. It begins from the theoretical meaning and real meaning, and subsequently points out the main problems in the existing research during summarizing the main research in and outside, and then indicates the probable innovations and the main difficulties.The second section is the analysis upon the system of"home bank-foreign branches". This paper confines itself in the relationship between the home bank and its foreign branches, regardless of any other organization styles. At first, this section expounds the characteristics of the system of"home bank-foreign branches", and then clarifies the home bank's aims, the foreign branches'aims and the employees'aims, and concretely digs out the profound reason for losses.The third section is the measurement models of this kind of operational risk. It mainly measures the operational risk by drawing lessons on the experience of Delta-EVT model under the supposition of five risk factors, and then analyzes the case of Allfirst Branch to illustrate the importance.The fourth section is the management framework based on those five risk factors. The management means how to deal with the five risk factors in order to abate the losses before they happen. And then it is focused upon two methods, insurance and outsourcing to mitigate the losses which have happened.