Risk Management Studies And Reference Of SHANXI Draft Banks

During the process of managing and developing the modern commercial bank, there are all kinds of risks existing. The Chinese commercial banks take operating risks, controlling risks and managing risks as their main development targets, among all of them, the quality of the risks management is the critical part to decide bank's operation succeed or not. Along with the economic globalization, the financial liberalization and integration, the acceleration of Chinese economical market-oriented reform as well as China joining WTO, the Chinese Banking industry will face the unprecedented development opportunities and the challenges; while with gradually opening up of the Chinese financial industry, more and more competition with overseas Commercial banks, the risks faced by Chinese Commercial banks tend to be enlarged dramatically. Therefore, further strengthens to the risk management research of Commercial bank is imperative, on the other hand, in the term of the risk management, while we pay more and more attention to overseas advanced experience, we should also value local experience from ours ancestor - - Shanxi ancient Draft Bank. This article chooses this as the breakthrough point, by researching and analyzing the risk management of Shanxi Draft Bank, simultaneously integrate the modern Commercial bank's risk management practice, makes every effort to seek proper risk management ideas and methods to suit our particular national condition and practice.The first major part of this article namely from the first chapter to the sixth chapter, had analyzed and studied the risk management procedure of Shanxi draft bank in six aspects. Firstly, Capital System, to set aside special capital for financial enterprise's from initial establishment is the ready-made experience to controls the financial risk, maintain the steady business operation; Secondly, Operational Risk Management,"the Secret key"system and a series of innovations strengthened the Draft Bank's resistance ability to risk; Thirdly, Draft Bank had so many branches , the effective control and reporting system make those numerous Branches work together without ups and downs; Fourthly, among all kinds of financial accounting control systems,"the closure gate"system is the most prominent one. The strict accounting system is the powerful safeguard to control risks; Fifthly, the staff management is also one of the important weapons to avoid risks, its effectively incentive mechanism, the strictly restraint mechanism, and the strict moral instructive mechanism sharpened staffs'capability, strengthened staffs'sense of responsibility, thus guard risks; Sixthly, Draft Bank and its other business partners in the industry cooperated to prevent risks. In order to guard against and control financial risks, draft bank coordinated within the interior group and cooperated with other social organizations in term of interests relationship; it sets up the associations in some big cities, moreover it also pays great attention to the coordination and cooperation with other financial institutions, this kind of phenomenon strengthened Draft bank's ability to guard and control risk. Based on massive historic information collected, the first six chapters mainly applied historical analysis method, refines some meaningful ideas and practical experience that can be used by modern commercial banks.The second part of this article, which is the seventh chapter, summarized and concluded the characteristics and the experience of risk management in Shanxi Draft bank based on the analysis of the previous 6 chapters ; as the same time, by using historical comparison method, and combining the current situation of our modern Commercial banks, proposed six suggestions to the risk management practice : Firstly, forms the correct concept and culture for risk management, make each staff aware of those potential dangers existing in their own position and be alert at all times, which develops the first barrier to guard risks; Secondly, establishes the capital supplement mechanism, raises the capital sufficiency ratio, expands the sources and channels of the Capital through both the internal fund raising and the external financing; Thirdly, encourages the dynamics innovation, pro-actively guards against the risk ; so as to positively prevent and minimize finance risk by innovating institutions, products and technologies; Fourthly, implements proper strategies to encourage , entrusts talented staff ; and stimulates their enthusiasm, restrains their behavior, and sharpens their capability through the establishment of incentive mechanism, restraint mechanism and training mechanism, thus controls the moral hazards in management process; Fifthly, in order to promote the formation of credit system, and build up a faithful credit environment, not only the banking credit system and the financial system must be strengthened, but also the formation of individual credit background, the reconstruction of social credit system, and cooperation between bank and society must be emphasized, so as that a faithful and harmonious financial and social environment can be built; the last but not the least, penetrates the"coordination concept"into the practice of bank risk management, strengthens the cooperation between various departments and Branches, positively adapts to the changes of social economy situation, adjusts operation and management tools, and maintains the uniformity with the movement of economy.