The Study On Economic Capital Management Of Commercial Banks

Since 80's in last century, under high development of financial market and more complicated risk status, along with deep understanding for risk management and capital management, the commercial banks explore to form the entirely new measures of risk management--economic capital management. The economic capital management reflects the new concept of modern commercial banks' value management; fairly solved the problems how to balance the risk and profit, fully developed capitals' risk withstand capability and the function of produce value, and gradually developing the common language of commercial banks' management in the world. At present, the research and application of economic capital management is in the initial stages, especially our commercial banks' economic capital management is underway, so it has not only theoretic value but also important practical meaning to study commercial banks' economic capital management.By ways of theory and practice combination, the article elaborates the meaning and function of banking capital and economic capital, investigates the methods and application status of commercial bank's economic capital measures and allocation, which introduces and studies commercial bank's economic capital evaluation with the RAROC and EVA after risk adjustment as the main index; it proposes the application ways and measures of economic capital management suitable for our commercial banks by comparing and cases analysis. It takes Industrial and Commercial Bank of China A branch as an example, which analyzes and studies the application status of commercial bank's economic capital measures, allocation, evaluation and so on, appraises and analyzes application effect, points out existing difficulties and deficiencies, puts forward the improved measures and suggestions. It provides useful reference for the application of economic capital management of our commercial banks.