Study On Internal Control Against Operational Risk Of The ABC

With the existence of commercial banks, there is operational risk. The understanding of operational risk is pretty superficial compared with what we know about its brothers, market risk and credit risk. How to control the operational risk has become the universal concern of the banking industry. As one of Chinese big4banks, ABC has been left behind due to various causes. Aging employees, huge number of staff, low capability of implementation, sophisticated corporation structure, and low standard of risk control are the tip of iceberg. To make our research on ABC’s case, and to improve the risk control are very meaningful and practical.This paper starts from the cases that happen and cause heavy damage and develops further to look into the underlying causes beneath the facts. Chapter Two is a brief introduction to risk management of foreign banks, definition of operational risk, measurement and continuous improvement. The introduction to operational risk theories will be contained in Chapter Three. In this part, both theories and effective measurement will be discussed. Chapter Four will be back to our ABC case to connect the theories with ABC’s daily operations, which gives us an insight to ABC’s current risk management and further development. Chapter Five gives summary to Chapter Four, pointing out the critical factors of operational risk management-people, procedure, implementation and corporate structure. Chapter Six the author gives some advice on the ABC’s operational risk management for each factor mentioned in Chapter Five.Through thorough analysis of the weakness in operational risk management of ABC, we try to detect the critical procedure needed to be taken and make some managerial proposals in the light of recent risk exposure events.further more.it’s also expected to inspire any great minds within the industry to think about how to make continuous improvement of operational risk management.