Risk Management Studies And Draw Lessons From Shanxi Draft Banks

Since the commercial bank produced, the risk is also bringing. Fundamentally, theirreconcilable contradiction between the profitability, liquidity and safety is the unification of riskand return. As the financial market competition intensifies, and the bank business developed andinnovated, the risk of bank shows a complex feature. The current risk management methods havebeen unable to meet the demand. This article is mainly study of the bank’s capital management,operations, branch management, staff management, financial management and culture, analysis themanagement method of the modern commercial bank risk management. Discussion onshortcomings, modern commercial banks in China should be in what respect to strengthen riskmanagement.Firstly, the article from six areas descript risk management in Shanxi Draft Banks: capitalcontrols, operations, branch management, staff control, financial control and culture. As capital, isdivided into two categories of "core capital" and "supplementary capital". Core capital is theinvestment of shareholders. And the supplementary capital is the protection of the share capital,equivalent to the modern commercial banks’ allowance for doubtful accounts, to protect the safetyof the capital. In the area of operation, the test key system, hand writing, watermarks and othertechnologies, make good effect in anti-counterfeiting.“Rishengchang”, for example, not a fake draftis found in its business years of one hundred. Shanxi Draft Banks take “discretionary profit virtualagent, pumping tired turn faster” in branch management. To the head office as the center, accordingto market information to make decisions, then the semicolons collaborate. Thus will reduce the riskin the course of basined, and on the other hand, it will conducive to overall business goals. In thestaff control, Shanxi Draft Banks takes incentives (body shares), constraints, and training, toimprove the moral quality of the staff and the operational level. These methods make staff and DraftBanks into an organic whole. In financial control, Shanxi Draft Banks first use of double-entrybookkeeping method. So each remittance must be registered in the outward remittance semicolonand inward remittance semicolon at the same time and then submit to the head office. Head officewill check case by case the balance, so that cross-checking, effective prevention of abused and leadto the occurrence of the internal corruption and problems. In the culture control, by the strict rulesand ethical constraints, control the risk of the occurrence.In the last part, the article investigate our modern commercial banks should be combined withShanxi Draft Banks in the risk management practice, to summarize the experience, and combinedwith the current economic environment and technical conditions, come to a conclusion in whichaspects our commercial banks should strengthen risk management. First, we should establish a sound and prudent business principle. Then, a good faith should be established. Last, a goodprofessional conduct is also needed.