A Research Into Risk Management Strategy Of Domestic Commercial Banks Based On Internal Control Perspective

Finance is the core of modern economy, and banks are the backbone of modern finance. Healthy and stable development of the banking sector is directly related to the health of financial system, the stability of society and economy, and even the security of nation. Since banking is a high-risk, high-debt industry, commercial banks were subject to a variety of risks since their foundations, and risk management of which is more and more difficult now. As the development of business and the increased competition, the risks faced by commercial banks begin to exhibit complex and changing characteristics. Adopting scientific methods to manage risk effectively is the foundation of maintaining sound operation for commercial banks. However, the current situation of risk management in China’s commercial banks is worrying. There are many reasons for this, including the combined effect of various internal and external factors, but the fundamental reason lies in the internal control deficiencies. Adequate and effective internal control is not only the important foundation of risk management for China’s commercial banks, but also the objective requirements to strengthen financial supervision and safeguard financial stability.This article is written from the perspective of internal control, studying the risk management strategy for commercial banks in China. It mainly uses approaches of normative research and qualitative analysis to do some in-depth discussion of the current situation, the problems and their causes and the countermeasures of risk management for China’s commercial banks. This article starts from the basic theory of internal control and risk management, and forms more objective and comprehensive understanding of their connotation, elements, achieving means and the relationship between internal control and risk management. Then it points out the main risks faced by China’s commercial banks, and analyzes their current situation of risk management, as well as the main problems and their causes. At the end, it proposes some improvements to tackle the problem from five aspects of internal control, including creating a favorable internal environment, strengthening the system of risk assessment, implementing control measures resolutely, ensuring smooth communication of information and improving the mechanisms of supervision and inspection.