An Empirical Research On The Status And Factors Of The Operational Risk Of Listed Financial Firms

Generally, financial firms are facing the market risk, credit risk and operational risk. It has been a long time since the concept of the operational risk had been put forward. However, this kind of risk has been paid attention by Chinese financial firms just in recent years, meanwhile; it didn't have comprehensive and systematic understanding like other two. No matters in the operational risk management concept, or management framework, or management instruments, Chinese financial firms have obvious deficiencies on these aspects and they have become obstacle to the operational risk management.By borrowing the advanced management experience of the international financial firms, this paper conducts a comprehensive and systematic study on operational risk management, according to the status of Chinese banking industry. First, this paper introduces the concept and classification of the operational risk, then; analyze the operational risk management situation of Chinese financial firms. Subsequently,this paper selects two banks and uses "basic indicator method" and "revenue model method" to study their operational risks; Secondly, this paper uses the binary choices model to analyze the operational risk based on mixed data with the macroeconomic factors, corporate finance and corporate governance factors, this paper treats all the listed financial firms as a whole, without taking into account the heterogeneity of the financial firms. So, based on panel data with the same variables, this paper uses the binary choices model to analyze the operational risk in order to analyze the heterogeneity of the financial firms. The results show that the heterogeneity of financial firms is not significant and the results based on mixed data are stability. This paper also compare the Logit model with the Probit model, the final result shows that the Probit model based on mixed data has a better explanation on the operational risk and the corporate governance factors have the most obvious impact on the operational risk; Finally, this paper puts forward the risk management recommendations for Chinese financial firms on the basis of the empirical analysis of the operational risk.