Study On Application Of Economic Capital In Risk Management Of HMB

With the increasingly fierce competition, how to improve its competitiveness, establish a sound risk management system, improve the financial risk control level, is the key and urgent problem to be solved for China’s commercial banks. The new economic capital will help China’s banks to improve the management level, enhance their decision-making ability, promote the construction of a comprehensive risk management system and achieve rational allocation of capital. The economic capital management can not only effectively control risks, also can speed up the balance of business development. So it becomes the advanced management method of international commercial banks. In recent years, the economic capital management began to be used in China’s commercial banks, we believe that it must lead to a new round of changes in the core competition of banking industry in the near future. In this paper, the author takes the domestic HMB as an example to study the economic capital application in risk management based on the basic theory of economic capital and the advanced international experience. At the same time, the application of economic capital measures has the very strong practical significance.Using the basic theory and measurement method of economic capital management, with the core of the banking crisis of the new Basel Capital Accord, this paper illustrates the application of economic capital in the banking management. Meanwhile, it regards HMB domestic banks as the object of study according to the actual situation of foreign and domestic HMB, and linking theory with practice, to analyze the current situation of economic capital management in HMB. Finally, the author makes a conclusion of the economic capital management achievements and shortcomings to solve the economic capital application problems what exposure in HMB and puts forward to improve the economic capital management measures.The topic of this paper is closed to the development trend of the current bank. Economic capital is the core and innovation capital of the sound development of the banking. This paper uses the measuring principle of economic capital, the statistical principle of the risk and quantitative analysis method of the relationship between risk and loss, also do a full and visual analysis to the actual case of HMB economic capital management and application, which gives the framework of comprehensive economic capital. Compared with the present study the majority of bank economic capital on the macro perspective, this paper, the typical case of HMB, analyzes the economic capital management and makes some measures to improve the application and effect of economic capital from microcosmic point. The conclusion is worthy of reference of domestic commercial banks.