China's Commercial Banks In The Context Of Financial Globalization, A Comprehensive Risk Management Study

With the full implementation of the New Basel Accord, many western commercial banks have adopted a strict system of enterprise-wide risk management. But Chinese commercial banks are still in their starting phase in risk management. The breakout of American subprime crisis highlights the importance of enterprise-wide risk management and gives a serious warning to our banking industry. With the all-round opening-up of Chinese financial industry, China is accelerating its pace to integrate itself into the process of financial globalization. Our banking industry is facing increasingly heated competition and more complicated risks. Thus, under such domestic and foreign circumstances, it is an important and urgent issue of Chinese commercial banks to establish a sound and effective enterprise-wide risk management system as soon as possible and to improve the risk management level in an all-round way.This paper first gives an analysis of the background and significance of the research on our commercial banks'enterprise-wide risk management and an introduction of the current research on risk management of domestic and foreign commercial banks. It also gives a general preview on the writing method and train of thoughts applied in this paper. Then it defines commercial banking risks and risk management, introduces the development history of commercial banking risk management theory and probes deeper into the enterprise-wide risk management theory and the risk management theory in the New Basel Accord, both of which underlie the enterprise-wide risk management system to be established by our nation. What follows are a summary of enterprise-wide risk management experience of advanced western commercial banks and a detailed analysis of the example of Bank of America Corporation. After that, it analyses the current risks facing Chinese commercial banks against the background of financial globalization and probes into the problems existing in the risk management of Chinese commercial banks. At last, according to the current condition of Chinese commercial banks'risk management as well as advanced practice of western commercial banks and relevant requirement of New Basel Accord, it proposes an enterprise-wide risk management system suitable for Chinese commercial banks.