| After several dozens year research and the innovation development, the international advanced banks had already formed RAROC as the core for economic capital allocation and performance evaluation of the risk capital framework, also known as RAROC system. For this, "the New Basel Capital Accord" to promote commercial banks to include in the performance assessment of risk factors, led to an important concept: Risk-Adjusted Return On Capital, RAROC. We should be in the establishment of economic capital management system, based on RAROC in advance at the core of performance evaluation. Capital is scarce, the traditional quantity expansion development model under the economic capital restraint is not sustainable, China's commercial banks must revolve the shareholder's return as the elementary object, using RAROC in various businesses of the bank's products to horizontal comparison, focusing on less economic capital occupy while higher RAROC, using less capital to push more business. This article selects the method of combining theory and practical with a large number of examples of easy-to-digest to introduce the RAROC model. The article takes the Bank of Ningbo as an example, used the real diagnosis method to study the RAROC and EVA as the core of the performance management system, simultaneously applied the RAROC model to the commercial bank risk management has made the comprehensive elaboration. Chapter III introduced the RAROC system and its applying in China's commercial banks' capital management. ABN AMRO from the fourth chapter in the economic capital of the advanced experience of management, economic capital of ABN AMRO Bank's organizational structure management, RAROC model applications are reviewed in order to inspire the domestic commercial banks to better management of economic capital, thus improving their own comprehensive risk management. Chapter V examined the use of empirical methods to RAROC and EVA performance evaluation as the core banking application in Bank of Ningbo. The full text of Chapter VII is a summary outlining the main thrust of the entire chapter, and look forward to a RAROC model in our application. |
