Research On Risk Control Of The Investment Banking For Chinese Commercial Banks

The boundary between commercial banking and investment banking has become increasingly blurred with worldwide changes in the financial environment, the pursuit of profit maximization, as well as the improvement of the ability against risks. Many major developed countries have re-established mixed operations of the financial systems, and the development of investment banking in commercial banks has become a global trend in the financial industry. With the acceleration of the process of financial liberalization and the promotion of the financial system reform, Chinese commercial banks have started seeking changes in business models to expand into the business of investment banking. That has become a strategic choice adapting to environmental changes and also a pursuit of its own internal demand of development. At the same time, Chinese financial regulatory authorities have gradually recognized the practical significance for commercial banks to develop investment banking and introduced a number of related policies, which opened the door for domestic commercial banks to develop investment banking. However, in the current situation, because of Chinese immature financial macro-environment, poor internal management ability, imperfect corporate governance structure and risk control system of commercial banks, the development of investment banking in Chinese commercial banks will face great risks that will endanger the stability of the financial system. In this context, based on foreign experience and Chineses national conditions, to explore how Chinese commercial banks conduct risk control of investment banking business and prevent its potential risks, is of very great practical significance to the smooth and sustained development of Chineses commercial banks in later mixed operation.Base on theories of finance, business management, micro-economics and the methods of induction with deduction, theoretical research with countermeasures reseach, this paper begins with making a brief account of the status quo on developing investment banking of Chinese commercial bank, then fundamentally analyses the main risk factors of Chinese commercial banks carrying out investment banking business. Learning from investment banking business risk prevention experience of commercial banks of Germany,Britain and the United States, Chinese commercial banks should use the relevant risk management methods, take internal control measures and improve risk management capability, to achieve effective control of risks from internal purposes; At the same time, building a leading regulatory model and formulating an appropriate regulatory measures are also strong and favorable external forces of Chinese commercial banks to control investment banking risks. Ttherefor, only through such internal control and external regulation, China can effectively control the risks of investment banking business for the commercial banks and ensure Chinese commercial banks to develop steadily in the mixed operation trend.