Research Of Operational Risk Management In Chinese Commercial Banks

With recent relaxation of financial regulation, globalization of financial operation and financial innovation, finance operational risk in commercial banking has experienced an increase. International banking industry and banking supervisory authorities are paying more attention on approaches for finance operational risk management and supervision. The paper discussed operational risk of Chinese commercial banks by definition of finance operational risk, and case study on global finance operational risk. By analyzing inefficient management of operational risk in Chinese banks, the paper discusses more efficient operational risk management and supervision from both commercial banks and supervisory authority.The thesis consists of four chapters. Chapter One presented theories, categories for finance operational risk and stated the critical role of operational risk management; Chapter Two introduced international practice on operational risk management, such as history of Basel Committee on Banking Supervision the Committee, prevailing international standards of British and American banking supervisory authorities, and current practice on major international banking industry; Chapter Three analyzed current finance operational risk management by case studies and concluded that lack of cultural value, incomplete corporate entity governance, short of internal control and outside supervision are among main issues in finance operational risk management; Chapter Four studied deficiencies on finance operational risk management in Chinese banking industry and gave suggestions on internal management and external supervision.Most contemporary operational risk management papers are concentrated on theory analysis and model comparison, while Chinese commercial banks are in early stage of finance operational risk management and has not systematically mastered risk management approaches and techniques. The paper tries to shift the focuses to practical operation and attract more discussion.