The Prevention Of Operational Risk In Commercial Bank Of China

Operational risk is not a new phenomenon, but also non-banking new topic, it is with the bank hand in hand. However, due to its hidden nature and endogenous, it has not attracted enough attention by the relevant parties. With the acceleration of global economic integration and the increasing development of capital markets, the size of the banking sector is also growing. Besides, the operation of a larger variety of business activities has become increasingly complex, which led to the case of operational risk the frequent occurrence. Today, the operational risk has undoubtedly become the world’s important areas of banking risk management. Among the many international organizations, the Basel Committee on Banking Supervision firstly put operational risk management into the risk management framework, which makes operational risk be the same important as market risk and credit risk, thereby forming the pattern of the three pillars of risk management. Meanwhile, the New Capital Accord firstly proposed the requirements, which each bank should allocate capital to the operational risk and the commercial banks should carry out effective monitoring and reporting in the following work. In short, you can say "new capital agreement" marks that the management of operational risk in the commercial banks has entered a new stage.Compared to the foreign countries, the majority of commercial banks is still in the joint-stock reform stage, and the research on operational risk has not been given sufficient attention. Both academic and the banking sector have long been used to focus on the market risk and credit risk, which led to the relatively backward in the theoretical risk of accumulation of knowledge and experience level of the operation of commercial banks. At present, the research on operational risk just stays in the stage, learning the advanced experience of foreign countries, most commercial banks have not established their own operational risk, and also the banking sector has not yet formed a unified, operational risk management System with Chinese characteristics. In recent years, facing the frequent occurrence of operational risk cases, the CBRC promulgated two guiding documents the "Notice" and "guidelines", clearly pointing out that inadequate internal controls is an important reason for the occurrence of operational risk. The documents proposed to accelerate the establishment of internal control recommendations of operational risk system for enhancing the prevention of operational risk in commercial banks.Based on the above background, this paper attempts to provide some ideas for the establishment of the internal control operational risk system. This paper used integrate theory with practice, firstly expounded the theory on operational risk and internal control, followed by the in-depth analysis of status and causes of the current operation Management, and then combined with the actual situation of China’s commercial banks, using the internal control system theory, try to constructer the framework of operational risk internal control system, and finally a short description of the use of the system.This thesis is divided into five chapters.The first chapter is an introduction. Thesis are introduced in detail the background and significance, while general introduction to domestic and international literature nonoperational risk and operational risk and internal control relevant literatures, this paper concludes with ideas and methods, summarize the main innovations of this article Point and the lack of a specific study to later make a explanation. The second chapter is about the commercial banks, operational risk and internal controls overview of the theory. The first part is an overview of commercial banks operating risk theory, first of allots explain its meaning, then the classification and characteristics of operational risk to do a simple summary of the characteristics of the complex directly determines the difficulty of prevention, which also made for later analysis A theoretical groundwork, and finally the existing regulations for an overview of operational risk; the second part is about the commercial bank’s internal control of theory, mainly from the definition, elements and summary of relevant laws and regulations; the third part of the operation from the commercial banks Risks associated with the internal control point of view of prevention through the strengthening of internal controls to the necessity and feasibility of operational risk.The third chapter discusses the management of commercial bank status of operational risk. This is a focus of this paper, first, on the operational risk in the business of commercial banks for an overview of the distribution, and summarizes and analyzes the main business of which the operational risk-prone sites, such as deposits and counter the risk-prone business, the main point Is:keep important items, as well as some special authority for the business behavior, by summarizing the operation of the business risk-prone points behind can provide specific direction to prevent the risk; followed by commercial banks in China in recent years cases of operational risk losses A simple descriptive statistics, summarizes the current commercial banks in China occurred in the case of the characteristics of operational risk losses, including internal fraud is its main manifestations. The incidence of internal fraud is largely due to human-induced, ie, the leadership staff of professional ethics, or caused by lax supervision, and therefore the prevention of operational risk should be more internal systems from the bank to find the root cause behind this is The establishment of the theoretical framework of operational risk basis; Finally, from the perspective of internal control on the current status of operational risk management for a Cause:Internal control weaknesses resulted in awareness of operational risk management concept behind; inadequate internal control measures Resulted in the lack of operational risk management functions; inadequate internal controls led to the implementation of operational risk control is not strong; weak oversight of internal controls led to the weakening of operational risk management; poor internal controls led to the communication channels are not in a timely manner to prevent operational risk. To sum up, the internal control system is the result of the imperfect operation of commercial banks, an important reason for poor risk prevention.The fourth chapter attempts of commercial banks to build the operational risk of the internal control system. This is another important section of this paper, through the third chapter of the analysis, operational risk in the occurrence of specific causes of internal control, this paper attempts to put forward a summary of the commercial bank system of internal control operational risk, mainly from the construction principle, the overall framework And specific aspects of how to build the three described. First, in principle,be constructed include:Implementation and internal control combination of five elements, reflecting the unique nature of operational risk and the operation of a scientific and rational process of these three principles, only on the basis of three principles built out System of commercial banks to realize the effective operation of risk prevention; and then the overall framework of the system, a brief description, from the horizontal point of view, it contains the five elements of internal control:internal control environment, internal controls, risk identification and Assessment, monitoring and exchange of information and feedback; from the vertical point of view, it contains the operational risk management process:control of targeting, risk identification and assessment of specific risk areas, risk control measures, risk measurement and reporting (feedback); final To be explained how to build the system, mainly through the improvement of the internal control system to build the commercial bank system of internal control of operational risk, the paper on how to for operational risk were prone to point to further improve the internal control system are described, culminating in a Relatively sound commercial bank operational risk internal control system.The fifth chapter is the last chapter of this paper, through previous research and theoretical system of the building, this chapter specifically describes how the system works. First, premises of the system:a clear risk strategy, and healthy risk management environment and a good organizational structure; and then how to use the system for operational risk are described in detail in this section.Full-text is always closely around how to operate the internal control system of the theme of risk prevention, outside to the inside, Deep layers of analysis, and finally reached a specific operational risk prevention system of internal control, hoping that the research results can be helpful for commercial banksThe main contributions of this paper are as follows:Firstly, build a more comprehensive commercial bank operational risk internal control system. Secondly, give full consideration to the current operational risk management of commercial banks, based on the system this paper proposed, control and prevention the operational risk of commercial banks.