Our Country Commercial Bank Operation Risk Early Warning Research

The commercial banks as the most important part of the financial rational allocation of resources and a market economy, has been subject to widespread concern for international investors, academia and regulatory bodies. Commercial banks mainly credit as a basis for currency lending and payment and settlement as a major business, to bear the risk premium as the main source of profit for the high debt, high-risk industries, not only to actively develop new financial products, services and help customers commitment and risk diversification at the same time, but also with the proper scientific method to analysis and manage the potential risks in the ordinary course of business. The level of risk management is the core competitiveness of the embodiment of modern commercial banking. With the financial markets are gradually opening up and rapid development of the commercial banks, followed by a pressure increase of risk management, credit risk and market risk management is maturing, the domestic regulatory authorities gradually realized the importance of operational risk. But recently few years, the frequent occurrence of operational risk events, but also significantly exposed the inadequacies of China’s commercial banks in the early warning of operational risk. In order to achieve efficient management of commercial banks to withstand the impact of operational risk timely and efficiently, warning of operational risk has become the current hot topics.At present, domestic commercial banks are lack of theoretical research or practical experience for operational risk. The scholars also mostly confined to elaborate the operational risk in New Basel Capital Accord and introduce or analysis of the capital measurement methods. But for precautionary operational risk, the risk of something timely and effective control and the subsequent risk mitigation is relatively small.Place in this background, the paper along with the main line:the characteristics and status of operating risk in China’s commercial banks-influencing factors Recognition and Measurement-early warning mechanism. First of all, through a lot of investigation and analysis found that operational risk events are wide distributed in China’s commercial banks, the ordinary course of business are relatively concentrated, technological backwardness and staff professional quality is relatively low. Clear the issues related to our operational risk of the early warning mechanism is not perfect, loss of data is difficult to obtain, information disclosure mechanisms are inadequate, lack of professional risk management staff. The true nature of the reasons lead to the occurrence of operational risk based on multiple dimensions of human factors, process factors, system factors, as well as external events, human factors are the main reason. Secondly, commercial banks operational risk identification methods, means, and the measurement mode were analyzed to select the appropriate capital measurement methods, which according to the scale of operation of commercial banks. Again, the focus of the article is mainly to build China’s commercial banks operational risk early warning indicator system based on early warning, target functions, warning mode, the warning process, through the four angles of the early warning indicator system to improve operational risk early warning mechanism. Finally, put forward suggestions on China’s commercial banks to strengthen early warning of operational risk. Do with lower cost of risk management to get higher returns, the regulatory capital and economic capital can be effectively configured. In this way, operational risk management capacity of China’s commercial banks can be substantially improved.