A Study Of Risk Management In The Transnational Operation Of Commercial Banks In China

Since the nineteen nineties, with the economic globalization and the further development of the transnational merger in China’s commercial banks, it becomes the major tendency that establishment of overseas institutions and transnational business have a bigger share in their whole business. The end of WTO period provides our commercial bank both a wider space for development and a special challenge when facing the new environment. The quantity and the turnover of overseas business are all rising rapidly. At the same time, according to the commercial banks follow customer motivation principle, the transnational business under import and export trade and the direct foreign investment of China are all increases fast, which result in the further development in our commercial banks.Different from the abundance experience of well-known multinational banks, the majority of China’s commercial banks began the first step to go out in the nineteen eighties. Although they are in smaller quantity and scale, the risk management for cross border control is still significant. Transnational businesses bring our commercial banks to a new management environment. They have to face the more complex and changeable market risk, such as the country risk, exchange rate risk and the transnational operation risk. Therefore, the successful management of these risks would be an effective part in the whole risk management of our commercial banks. This article tries to introduce the approach on how to management the three kind of risks mentioned above in operation of transnational business, combined with the developed western commercial banks’advanced risk management experience, for the purpose of our risk management enhancement in transnational commercial bank business.This paper is divided into five parts to study the risk management in transnational business of commercial banks in China. First part introduces the background, research status and discloses the text structure. The second part shows the reality of our transnational risk in our commercial banks and analysis the existing problem in risk management. The next part analyzes our weak point in commercial banking risk Hamagement based on the comparability of the advanced risk management experience of foreign commercial bank. Examples of HSBC Group are followed to fea..teature its beneficial risk management skills on country risk, foreign exchange risk and operational risk. And the fourth paragraph puts forward measures to strengthen transnational banking risk of our banks. The foundation of effective risk management system and the cross cultural management strategy on the transnational business are preferred to improve our risk management level of transnational banking business. The last paragraph is the conclusion.