Basel Ii Operational Risk Concepts And China's Commercial Banks Operating Risk Management Strategies

A famous banker once said that banks profit by exposing to venture and lose by failing to having an effective risk management system. It is commonly believed that the effects of risk management system depend on the weakest part in the course of managing risks. With the movement of financial market, financial institutions face more and more new kinds of venture. And these new risks become the weakest parts of the whole risk management system. As a result, financial institutions have paid more attention to these new kinds of venture in recent years. Up to now, the focus has been extended from credit risk to market risk and then to operational risk.The topic of operational risk is old because each financial institution faces operational risk at the moment when it began financial business. But the topic is also new. Because there is not an uniform conception of operational risk at present.In China there is still a demand of improvement on credit risk management. But fortunately it has gained enough attention. The market risk is just at the beginning, but we still have made some rules about it. However, there is nothing to put the operational risk under the supervision framework. Some further studies have suggested that loss in operational risk incident happened frequently in our country, operational risk increasingly becomes the main risk facing by banks. So Chinese financial institutions begin to concern operational risk now. And how to improve our capability to control operational risk become one of the most important things for Chinese banks and Chinese government.This paper begins from some severe cases arising from operational risk. And then give the conception of operational risk, analyze operational risk facing by Chinese commercial banks, bring in the management...