The Research On The Internal Control Of SPD Bank Loan Business

Subprime mortgage crisis broke out in the United States in2008. Five major investment banks in the United States have been or bankrupted, or acquired, or restructured, which led to the global financial crisis. Today, while the global market still struggle against the financial crisis, the outbreak of Greek sovereign debt crisis shakes worldwide investors again. By December2006, China’s banking business has been fully opened to the outside world and the transition period of China’s Entry to WTO has been ended. Therefore, the international competitions are escalating. Thus commercial banks in China speed up the process of reform. However, in the process of the reform, many major cases of bank failures emerged and exposed their weaknesses in internal control. Internal control has become the core competitiveness of commercial banks. The failure of internal control will bring disastrous consequences. Therefore, internal control has great significance for preventing systematic risks and creating a healthy financial environment in China. An effective internal control system plays an important role in the reform of commercial banks.The theme of this paper is to study the internal control of SPD Bank loan business. First of all, this paper describes popular internal control theories. Then, based on internal control theory from COSO report and Bank Internal Control of Basel Committee, the paper discusses five main factors of internal control:control environment, risk evaluation, control measures, information and communication, supervision and rectification. Further, this paper takes SPD Bank loan business as an example. The study focuses on internal control problems in prior-loan, current-credit and post-loan periods and puts forward proposals to solve relevant problems.