Study On Risk Management In Chinese Commercial Banks Under The New Basel Agreement

The risks faced by international banking industries are increasingly complicated and this forced the commercial banks to emphasize and strengthen the management of risks. As a result, the management level of banking risk management advanced along with the development of the financial liberalization, globalization and innovation since 1970s. At the same time, the banking industries in China have learned continuously from their western counterparts the advanced management experiences in the reforming of Chinese banks and the level of their risk management has been upgraded substantially. But overall, the current level of risk management in Chinese commercial banks is still relatively low and the level of Chinese commercial banks risk management compared with the New Basel standards still has a gap.The thesis studied risk management of the commercial banks. First, the author summarized the related theories of risk management of the commercial bank, including traditional risk management theory and the theories of modern financial engineering and corporate governance. This lay a theoretical foundation. Then, the author introduced the "New Basle Agreement", and analyzed the historical development of the Basel Agreement, and analyzed the main content of the "New Basel Agreement"and raised the impact of the New Basel Agreement to Chinese banking industry.The author has chosen the commercial banks of U.S.A., Germany and Singapore especially, and enumerated the main experience in the risk management practice of the three countries separately. The experiences include the design of the risk management frame, the application of the risk management methods and technology and so on. According to these experiences, the author summarizes the general experience of the international commercial bank risk management, namely sound corporate governance structures; clear risk management strategy, the integrity of risk management organizational framework; sound regulatory framework and strict authorization management; advanced risk management techniques; high-quality practitioners; market-oriented business ideas. These are indispensable key elements of risk management that make the large international bank succeed in banking operation.The author expounded several problems of Chinese commercial banks in the system of property rights, management mechanisms, credit risk stock assets, capital adequacy ratio, financing mechanisms, and then analyzed the causes of such problems, namely the error of property rights system, imperfect external market, imperfect credit legal environment, banks risk management techniques behind. At last, according to the problems of Chinese commercial banks risk management, the author constructs the management system from three perspectives in consideration of the experience of the advanced international banking risk management in combination with the internal and external environment of Chinese commercial banks. First, reforms should be further carried on so as to create a good external environment for Chinese commercial banks. Secondly, internal risk controlling and managing and administrating systems should be perfected so as to enhance competitive capability. Thirdly, external management and comprehensive administration should be adopted and enforced so as to avoid and dissolve the risk of Chinese commercial banks.