Research On Internal Control Of City Commercial Banks

With the further opening up of China’s financial market, city commercial banks (hereinafter referred to as:City firm) has also been an unprecedented development. City firm plays a very important role in China’s financial system, which is in charge of the country’s financial sector in order to defuse the risk of urban credit cooperatives exist to support local economic development and the formation together. After two decades of development, the City firm by virtue of geographical advantages and the natural advantage in close contact with SMEs, the operating characteristics of the initial formation, and entered a stage of rapid development, according to statistics by the end of 2013, China has had 145 city commercial banks, tens of thousands of outlets located in various parts of the country. By the end of 2014, the total assets of China’s banking institutions reached 168.16 trillion yuan, of which, the total assets of city commercial banks reached 18.08 trillion yuan, accounting for the banking institutions ratio rose to 10.8%. Visible, firm in our city occupies an increasingly important position. Since the main profit model is the use of Chinese commercial banks deposit and loan spreads to make a profit, however, with the interest rate market promotion, as well as the continuous development of Internet banking, which will lead to savings and loan spreads narrowing. In the competitive market, the city commercial banks, especially places opened city commercial banks, due to low brand awareness, competitive pressures in the banking sector is very large, many city commercial bank deposits and loans regarded as an indicator of the importance of employee performance appraisal One of the criteria, but often underestimate the bank’s internal control and risk management issues, leading to a variety of financial violations occur frequently. Therefore, the analysis of urban commercial banks internal control problems in constructing internal control system in line with the development of its own genus priority.This paper mainly financial fraud in December 2010 Qilu Bank encountered, for example, read a lot of news and screening by collecting information and relevant literature, and after, and then organized into data. This paper first describes the overall development of the social background of city commercial banks, the development environment, and then Qilu Bank brief introduction, and then introduce the basic situation of cases occurred in the process of Qilu Bank and losses arising from this case, and then analyzes the events cause, Qilu Bank itself (internal control imperfect environment, risk assessment fails, poor implementation of internal controls, etc.) and the problems existing in the external economic environment (regulatory failure, external audit failure, etc.), which combined with the development of the current situation of China’s city commercial banks, From the analysis of both internal and external causes of problems with its internal control building, and propose appropriate corrective recommendations on the analysis of the main problems, such as:the establishment of good internal control system and improve risk identification and prevention capacity, strengthen internal and external audit, as well as to strengthen the regulatory functions of the CBRC, three-dimensional structures of operational risk management framework, establish a reasonable operational risk prevention mechanism, a clear market positioning, optimize employee incentives, as well as the establishment of city commercial banks to exit mechanism discussed face to face, in the hope of City Commercial Under the background of the rapid expansion of the bank, its development can play a role in learning and reduce the development process of China’s city commercial banks in the accident rate, and promote the healthy and steady development of China’s banking industry.