Research On Operational Risk Of Commercial Bank

In the New Basel Capital Accord, the risks of commercial banks are attributed into three kinds- credit risk, market risk and operational risk. Among them, the operational risk is included into the accruement and supervision for the capital, which is the main content that Basel Committee revised in 2004. In compliance with the development of the international finance, China Banking Regulatory Commission(CRBC)established the Management Guidance of the Operational Risk for the Commercial Banks, and the Capital Supervision and Measurement Guidance of the Operational Risk for the Commercial Banks successively, which forward the instructions for the operational risk management of our commercial banks. As one of the four state-holding commercial banks, the Agriculture Bank of China (ABC) launched its initial public offering in Hong Kong on July 15th,2010 and in Shanghai on July 16th,2010 successfully. n the process of ABC going listed, big and serious cases happened frequently, which was the shortest aspect and huge concerned by the management divisions and supervision ones. So it's very important for ABC to strengthen the operational risk management, and build a scientific and effective operational risk management system.In this article, data analysis, comparison analysis and case study are the main methods applied. First of all, it generalizes the definition and attributes of the operational risk, explains the operational risk management in the New Basel Capital Accord and the unscrambles and regulations by CRBC. Those provide the policy and law instructions to analyze the operational risk of ABC. Secondly, it analyzes the points of the operational risk management of the overseas banks, and the procedures of the operational risk management from Citibank and Deutsche Bank. Together with analyzes the points of the operational risk management of the China and the procedures of the risk management from the ICBC/CBC and Bank of China. Those provide the experience and practice references to carry out the operational risk management in ABC. Thirdly, it summarizes the five characters of the ABC operational risk management through lots of the data and case studies of the ABC commercial cases between 2001 and 2008, and makes the specific analysis for the causes. At last, it puts forwards the countermeasures and suggestions to strengthen the operational risk management in ABC from five ways, including building the management structures, consolidating the staff management, speed-up building the modern operational system, choosing the right risk releasing tools, improving the initiative and applying assessment, etc.