A Research On Operation Risks Of Commercial Bank

In recent years, operational risk, which has drawn broadly attention, poses challenges to the banking industry. Based on the prudential frameworks provided by the international supervisory organizations and the prevailing practices conducted by the internationally active banks, a tailor-made operational risk management system for Chinese banks is presented.First of all, the reasons that cause the increasing operational events of the internationally active banks and Chinese banks respectively are listed to explain the different risk profiles between the above two. Then, according to the rule of development and the risk management status quo, Chinese banks are considered to have the qualification to implement the operational risk management. Next, Due to the on-going improvement of the institutional system outside, an effective internal risk management system is designed to strengthen the operation of Chinese banks, which includes:1) risk strategy and culture; 2) the organization structure and duties; 3) risk management procedures; 4) risk management toolbox; and 5) risk buffers. Besides, the internal control function plays a key role in the whole system. At last, suggestions on outside environment are mentioned to facilitate Chinese banks'evolvement in this area.This paper exhibits a new angle of view on some issues, such as the relationship between the internal control and the operational risk management, the approach to estimate the regulatory capital requirement for operational risk, the steps of implementing matrix management, the tailor-made risk management procedures, and risk management tools as well. It's sure that these suggestions will be helpful to enhance both the awareness of operational risk and the management practice. Apparently, lack of skills and limited information leave more behind, which need studies in depth and further discussion.