| As the banking operation environment got increasingly complex and the reform of the global financial regulatory had been continuously advanced, banks should be concerned about their ability to manage risk more than the results of operations. Thus, while remaining competitive in a wider range of industries, to further strengthen and improve risk management becomes an important issue for commercial banks. Economic capital management system considers both banks’ risks and benefits, which contributes to banks’ management quality and in turn achieves banks’ ultimate goal of maximizing shareholder value. Economic capital management belongs to the forefront of banking risk management theory and how to establish and improve it is becoming a problem that commercial banks have to face during their development process. Throughout the process of economic capital management, measurement of economic capital is a prerequisite, which reflects not only the actual risks taken by banks, but the guarantee of the efficient allocation of economic capital. Therefore, the systematic analysis of economic capital measurement methods and models, as well as the applied research in the practice of commercial banks become particularly important. Currently, the exploration of economic capital measurement among domestic academic group is just getting started. In case that the literature is quite few and practice is still in the primary stage, this paper comprehensively and systematically reviewed and evaluated the current domestic and international academic literature in the very beginning. Then took account of the Basel regulatory capital requirements and domestic capital regulatory approach, based on the statistical theory and measurement methods, combined with domestic and international economic capital theory and practice of commercial banks, in turn made recommendations for the present China’s commercial banks economic capital measurement. |
