Research On The Internal Risk Control Of China’s Commercial Banks

Commercial Banks is vital to the nation’s financial system. In the process of social and economic development, commercial banks should become an indispensable part in the development of national economic. It should not only bear the basic functions of fund raising, loan issuing, funds settlement and economic benefits creating, but also play an important role in guiding currency flow, increasing the efficiency of funds, adjusting total social demand for money, etc. However, financial industry is a high-risk industry. Bank operation bears huge risks due to the nature of monetary management. Therefore, scientific and effective risk controls of financial industry is directly related to the survival and development of Banks and other financial institutions because risks will exert huge impacts on the whole society once formed.Nowadays, the occurrence of risk is increasing along with the expansion of scale and business scope of commercial banks, as well as the increased complexity of financial products. Domestic bank’s internal risk control had attracted widespread attention due to the frequently exposure of a series of major financial cases happened recently.This work is based on the knowledge of management, audit, accounting, central banking and the theory of internal control, and lessons of practical experience and development trend of internal control from foreign central Banks and monetary authorities. A series of scientific measures were put forward on the basis of analysis of related problems of listed banks of our country, such as internal control environment, risk assessment, internal control activities, information and communication, supervision and evaluation of internal control.Five parts were included in this article:Part1:The background and significant of this paper was included. The innovations, structure and deficiencies of this paper was also put forward.Part2:Related theories on internal risk control of commercial banks. The basic theories of control, internal control as well as the detailed internal control of commercial banks were introduced and the basic framework of internal risk control of china’s listed bank was analysed thoroughly.Part3:From the perspective of internal and external risk control of listed banks, referring to international experiences and based on the status quo of internal risk control in China’s commercial banks, the defects in our commercial banks’ internal risk control system were pointed out.Part4:International comparison of commercial bank’s internal risk control. The features and practices of three developed countries (American, England and Germany) of the commercial banks were introduced. The enlightenments that we can draw from these were also summarized.Part5:Suggestions of improvement on internal risk control of commercial banks in our country were put forward in view of the existence of defects in internal risk control and external supervision in commercial banks of our country.