Commercial Banks Operational Risk Quantitative Analysis

New Basel Capital Accord, issued by Basel Committee on June 26th, 2004, which brings operational risk into measurement framework and the capital supervising framework. The New Basel Capital Accord takes the lead in bringing it into risk management framework,putting forward the widely accepted methodology of measuring operational risk. It asks financial institutions allocating capital fund for it,and make a set of qualitative standards to judge whether an institutions has qualification to use some kind of measurement methodology. This new accord represents the last achievement in risk management and supervision.The reason of Basel Committee attaching importance to operational risk is some catastrophic financial affairs happened in 1990s. And some operational risk affairs happened in China recent years beget financial supervisor's attentions also. The operational risk measurement represents the international tide and the advanced method in risk management.Nowadays, most of Chinese banks are experiencing the transition period to the real commercial banks, with imperfection of internal control mechanism. Operational risk is one of the main risk resources, and the proportion to the risk of commercial banks is far larger than that of international level. The research of measurement and management of operational risk in China is very important and practical in this circumstance.The author sorts out the measurement of operational risk in New Basel Capital Accord and the recent achievements in the theory field. Choosing appropriate approaches which fit for Chinese bank's situation to do some demonstrates. This can do good promotion to Chinese banking system in the measurement of operational risk.There are four chapters in the article.The main contents of the first chapter are the general descriptions of operational risk. Firstly, the concept of operational risk was given.