The Study On Operational Risk Measurement Methods Of Commercial Bank In China

The risk management is an eternal topic in the commercial bank's developing process, effective operational risk measurement plays an important significance, which not only can enhance the core competitiveness of commercial bank,but also can strengthen the competitive risk management,guard the bank's loses,promotive the brand and make the finance industry health. Basel Committee on Banking Supervision (BCBS) has issued its new international capital accord in June,2004, in which operational risk was juxtaposed with market risk and credit risk as a whole in the first time, which have become three major risks of today's financial institutions, the operational risk management and regulation principles have emerged, and the economic capital of operational risk was requested. In March 2005, China Banking Regulatory Commission (CBRC) promulgated the notice which strengthen the work of antioperational risk and pulled open the new stage of operational risk's supervising and managing officially. CBRC in June 2007 issued a "commercial bank operational risk management guidelines," which made a further request for the risk management of banks, encouraged the banks to establish the risk management system which is suitable for the actual operating level, operational risk measurement and management became the key points of the sound operation of the banks. In 2008 the traders of Societe Generale operating irregularities caused huge operational risk loss events, which raises the importance of risk management operations. In order to regulate commercial bank operational risk regulatory capital measures, the CBRC promulgated the "commercial bank operational risk regulatory capital measurement guidelines," in September 2008, which will play a very important role in controlling the operation of the risk of commercial banks.This paper takes the commercial bank's operational risk measurement methods as the main study object, with a focus on China's commercial banks for operational risk measurement model and empirical research. First of all, the paper introduces the application practice of operational risk measurement methods of domestic and foreign commercial banks, then according to the reality conditions of the operational risk of China's commercial banks at this stage, proposes the actual operational risk measurement methods which is suitable for China's commercial banks. Considering the lack of data, we choose basic indicator approach and income model to give the empirical analysis of operational risk in China's commercial banks. The results shows that the capital requirement based by basic indicator approach is very large and two methods has their own certain applicability, but the effect of income model is superior to BIA.Finally, the paper proposes the countermeasures and suggestions of the operational risk measurement methods application of China's commercial banks.