Internal Control Study Of Basic Operating Unit In Commercial Banks

Banking industry is the center of modern economic life, and its security and stability play an essential role in the whole industry and the economic society. With the improvement of global economy, since 1990s the scale of bank has enlarged, volume of trade has amplified and the complexity of management has intensified, which correspondingly lead to a series of operational risk loss events that astonished the global financial community in foreign countries, for instance America's Salomon Brothers suffered from S60 million losses due to the mistakes in accounts process; Japan's Daiwa Bank suffered from S1.1 billion losses resulted from the operational risk control system deficiency; the bankruptcy of Barings Bank because of employer operational risks; Societe Generale suffered from S7.3 billion losses on account of a trader, Jerome Kerviel's unauthorised trading. In china, due to the failure of internal control and insufficient operational risk management, some major criminal cases such as "Gaoshan embezzling 1 billion RMB"in Bank of China, "financial fraud"in China Construction Bank Jilin branch, and "theft of Handan Treasury Warehouse 55 million in cash"in Agricultural Bank occurred. These startling cases pose a great challenge to the operational risk management in financial institution.Combined with the latest home and overseas theories and practices about the internal control and operational risk management in commercial banks, with a basic operating unit in a commercial bank as its object, adopting comparative method and demonstration analysis method, this thesis analyses the current situation of our basic commercial bank's internal operational risk control and its defects and the causes, and then puts forward a general thought that Chinese commercial banks should strengthen its systematic and centralized internal control system in its basic operating unit, reinforce the administration and control to the grass-roots organization, enhance their precautions and defences against risks, ensure its healthy, steady and sustainable development. At last, this paper proposes a series of specific approaches and suggestions to the improvement and perfection of internal control and operational risk management in the basic operating unit of commercial banks from three aspects: improve the internal and external environment of internal control; strengthen the supervision of higher authorities; promote its initiative and activeness.