Risk Identification And Management Of Gold Financial Businesses In Commercial Banks

Given the great growth potential of China’s economy and the unprecedented dema nd of gold financial products, commercial banks have released various gold financing b usinesses to meet the increasing the demand of “the gold financing fever”. Meanwhile, gold financial products bring huge intermediate business income, as well as opportunitie s and challenges. The new profit and business model certainly will lead to greater operat ional risks. Though internal control systems for risks of China’s commercial banks is de epening and accelerating,the continuous intensification of internationalization exposes more and more risks existing in the financial products of commercial banks. Under today’s market competition, commercial banks are strengthening their risk management in order to better survive in the market and further enhance their core competitiveness. Though C Bank has performed well in risk identification and risk control in relation to gold financial businesses, there still exist problems like front desk sales personnel’s over dependence on risk rating models, insufficient attention to personnel risk, overly traditional risk management approaches, scarce reference to advanced experience aboard, etc.This study analyzes the risks of the three major gold financial businesses in C Bank: personal account precious metal, personal physical precious metal and gold Au(T+D) business. Firstly, this study introduces gold financial planning, classification of gold financial tools, the current condition and risks of the three major gold financial businesses in C Bank. Secondly, this study presents risk rating questionnaires for personal clients and discusses corresponding risks with a brief introduction of risk rating models. Finally, a risk management method is proposed for the risks in C Bank that spot gold business should be transferred to gold futures market, accompanied with analysis of the principle and feasibility of this method. Through research, this study hopes to contribute to improving the risk management of gold financial businesses in C Bank.