The Research On Financial Risk Management Of Commercial Bank

Commercial banks operating currency is a special industry, is a high-risk industry,since the1990-2000s, many commercial banks in international financial risk causedby the "tragic" case, which makes people see the inherent risks. Especially theoutbreak of the Asian financial crisis, so that the commercial banking system in Asiancountries have suffered heavy losses in varying degrees, the ability of commercialbanks to deal with weak financial risks and risk relief mechanism is not perfectexposed, so that the world financial risks of commercial banks to re-established tostrengthen the awareness and concern.This paper introduces the commercial banks of the meaning and content offinancial risks, financial risks caused by loan defaults as the focus of the study WenWen, noting that the financial risk of commercial banks to prevent loan defaultscaused significant. The paper also pointed out that China’s commercial banks andfinancial risk assessment models and management methods lags far behindinternational standards. In assessing the financial risks, the financial business of theuse of loans, non-financial data and subjective judgments combined credit, while theinternational community through the use of a variety of risk assessment models forrisk assessment. In terms of managing financial risks, China’s commercial banks toadopt five-category loan classification, and the "New Basel Capital Accord" requiresIRB. For accounting purposes, the accounting standards require the use of the futurecash flow method provision for impairment, prevent financial risks, while the IASBhas proposed to use the expected loss model to reduce procyclicality. All aspects ofthe whole, China’s commercial banks to prevent financial risk approach are still manyproblems, needs improvement.In this paper, the Bank of China as the research model, to clarify the concept offinancial risk management of commercial banks, analyzed the potential financial riskmanagement in the Bank of China manufactured, and find the key to solving the problem, to draw more domestic and foreign commercial banks to financial risksmanagement experience, get some inspiration from the realization of the risks andbenefits of the credit mechanism to integrate and promote sensitivity to interest ratesand exchange rates, strengthening the balance sheet activities, risk management,business cost-effective management, financial analysis steering risk-benefit analysis,the deepening of the internal control system of accounting and disclosure and possiblepaths steering and other construction. Both theoretical exploration and innovation, butalso workable guidance.