The Research On Process-Based Operational Risk Management And Positive Analysis In Chinese Banks

Operational risk is one of the three most important risks facing by the bank. The bank should have a good risk management on it as well as credit risk and market risk. Operational risk was born followed the appearance of the bank. The existence of operational risk has influenced more departments in the bank than credit risk and market risk. What is more, it has caused serious damage to the bank far more than the other risks. However, the operational risk started to attract people's attention just from the twenty century of last century. Until Basel Committee decreed Basel II Accord and pull capital supervise request for operational risk in it, operational risk has started to be focus and researched by people. So far, it is still in primary step about the research on management of operational risk by experts in the world. Just a few of international banks establish internal loss database and are able to assess the level of operational risk.In China, the operational risk happens in our banks frequently. The cases such like personal violation operation,inside and outside cheat continually expose by the news and CBRC. All of these have brought bad influence to the reputation and management of the bank. Compare with the international bank, the bank in China don't have a deep knowledge of operational risk. So, they are hard to distinguish operational risk from the risk in bank. Moreover, because of the lack of basic preparation, it is hardly to measure operational risk in practice. The experts just try to introduce the models which proposed by Basel II to measure operational risk. So it is an urgent challenge for our bank and experts to study how to find the proper method to recognize operational risk in the bank in china, and how to estimate the loss arisen from operational risk accurately, ultimately, based on all of these to monitor and control operational risk and establish a whole system of operational risk management.According to this, through study on the theories and concepts of operational risk, the paper designs the system of operational risk management based on process and the process: recognition,measurement,monitor and control are analyzed systematically. In addition, the paper designs the method to recognize operational risk, then gathers the main risk factors statistics; the paper discusses the feasibility of the method for measuring operational risk combined with the positive analysis; the paper makes clear the content to monitor operational risk and a governance structure is built compare to the international banks; finally, the paper establishes an evaluation system to compare the ability of the operational risk control in three china banks, helping the banks to examine the flaws in controlling process. In this paper, qualitative and quantitative analysis are used to give some suggestion on designing the process of operational risk management. Gather all of the process together effectively to make the greatest influence on management of operational risk in bank.