The Measurement Analysis Of China’s Listed Commercial Banks’ Operational Risk Based On Income Model

The Commercial Bank of our country under the trend of reform and opening uphas gradually entered the era of innovation. Financial innovation has become one of thenew trends of contemporary commercial banks, however, the financial risks associatedwith have become increasingly prominent, especially, financial innovation in theavoidance of the original financial risk will produce new financial risks, such as creditrisk, design risk, legal risk and operational risk, which become the important factor torestrict the development and innovation of financial. Among them, Operational risk hasbecome what attracts the world’s attention and discussion.In recent years, China’s operational risk loss cases frequently outbreaks, and theshocking loss cases and startling figures gives our banking and regulatory authoritiesalarm again. In2004, operational risk is formally incorporated into the new Basel IIcapital regulation system, while commercial banks around the world also involveoperational risk management as a necessary part of their own risk management scope. InBasel III Promulgated in2010risk areas have had a further expansion. Throughout thestudy of operational risk at home and abroad, including several aspects: defining theconcept of operational risk, risk measurement and risk management. However thedomestic research on operational risk mainly reference to the content of the new BaselAccord and introduce the more advanced measurement methods. Unfortunately, theyoften tend to overlook the characteristics of China’s commercial banks andenvironmental development. In this paper, considering the premise trends of theoperating risk management of commercial banks, I define operational risk managementfor China’s commercial banks firstly, and secondly analyze the current situation fromcommercial bank operating risks. Thirdly by comparing the methods, I use the incomemodel to analyze the sample data of eleven selected commercial banks, at the same timeI also classify the eleven selected commercial banks into two parts to do a comparativeanalysis. Finally, according to the results of the regression analysis, I draw conclusionsand propose policy recommendations to strengthen China’s commercialbanksoperational risk management.