The Comparative Study On Economic Capital Management Of Western Commercial Banking Groups

In the recent years, foreign banks have gradually formed a completely new risk management means—economic capital management. Along with its application more and more and extensively,the economic capital management becomes the risk management style of accepting by international banks.According to economic capital theory and means, this article comparatively analyzes conomic capital management calculation; economic capital collocation and economic capital performance appraisal of westen commercial banks. And combining the practice of economic capital management in our country, the thesis gets strategic choices, and arrives at the conclusion.From the structure this thesis about economic capital management can be divided into fou larrge parts: Firstly, starts from forming process of economic capital, compared with the traditional capital---accounting capital and supervising capital, which shows the importance of inventing this method in risk management of banking groups. This paper introduces the framework of economic capital management, sets forth the measurement of economic capital which used to cover the unexpected loss of commercial banks and the allocation principle and performance evaluation of economic capital. As regards Basel New Capital Accord, this paper also makes analyses on the economic capital management and the requirements of IRB and makes an introduction on the economic capital measurement. Then choosing three western commercial banks, this paper compares their economic capital measurement approaches based on their selections of rating methods,measurement indexes and so on, and makes an empirical analysis on the economic capital measurement of Switzerland Bank and America Bank. The third part of this paper compares the economic capital allocation and performance evaluation of the western commercial banks. At first, this paper analyzes and compares the different economic allocation approaches which utilized by different commercial banks based on the distribution effects. Then making researches on the different performance evaluation systems of different banks, this paper obtains the differences and similarities of the different performance evaluation systems. The last part studies the present situation and problems and puts forward some suggestions in order to strengthen the economic capital management of Chinese commercial banks. The suggestions include that the establishment of comprehensive risk management system,the improvement of technical condition of implementing economic capital management and on so.