Abc Bank Foreign Exchange Risk Management Internal Control Perspective

With the further development of the world economy globalization, the relationships between China's commercial banks and the international financial markets are getting more and more closely. So the banks on longer just emphasizes on the traditional business but develop a wide range of business. However, the world globalization is a double-edged sword. It not only brings the opportunities but also challenges to China's banking industry. For example, world's financial risks become a serious threat to the security and development of our banks. So risk management is more and more important in commercial banks. Under such a background, the Basel Committee issued the New Basel Capital Agreement to give some suggestions about how to manage risks in the banks. These important measures provide a new framework for China's commercial banks to carry out risk managementAs a major business in ABC Bank, the foreign exchange business plays an important part in ABC bank's profit. Besides, it helps ABC Bank to improve the competitive power. However, with development of China's market economy and the reform of foreign exchange system, China's foreign exchange risks are raising now. Though ABC Bank has some innovations in foreign exchange risk management, there is a large gap when compared with foreign Commercial Bank's risk management. This is caused by the imperfect internal control system in ABC bank.Because of the important position of foreign exchange risk management in ABC bank risk management system, this article analyzes some international and domestic regulations on how to manage foreign exchange risk, and researches the ABC bank's foreign exchange business, then it concludes some reasons caused ABC Bank's foreign exchange risks. Finally, based on internal control theory, this article gives some suggestions on how to improve the level of foreign exchange risk management.