Shaanxi XY Rural Commercial Bank Operational Risk Management Research

Operational risk is one of the most ancient risks of commercial Banks. In recent years, with the speeding up of global economic integration and financial innovation, banking operation risk is more complicated, and the loss is more serious, operation risk management gets more and more attention. As local corporate financial institutions in county, rural commercial banks are transformed by rural credit cooperative unions in most instances. The operation risk management started late, and faces a lot of problems. How to effectively strengthen operational risk management, and reduce the asset losses and reputation losses caused by operating risk events, become a subject which rural commercial banks urgent needs to solve.This article selects Shaanxi XY rural commercial bank as the research object, chooses its organization structure, system construction, management means and so on as the breakthrough point, analyzes its operational risk management status, problems and reasons, and through the statistic and analysis of the bank’s internal inspection results, points out the weak links in its operational risk management. By using the theory of the Basel Capital Accord, the internal control theory of COSO, and the process reengineering theory, this paper puts forward a plan for XY rural commercial bank to strengthen operational risk management, and measures to secure the implementation of the plan.There are three conclusions in this paper. First, the operational risk management of Shaanxi XY rural commercial bank is weak at present. Main show is the lack of policy system, the lack of management process, the lack of management tools, the poor infrastructure, and so on. Second, the plan for XY rural commercial Bank to strengthen operational risk management includes four aspects which respectively are developing the strategy, designing process, perfecting infrastructure, optimizing the environment from. Developing the strategy includes identifying business goals, standard organizational structure and improving the content of policy system, and so on. Designing process follows the steps of definition, identification, evaluation, monitoring and measurement, control and slow release, report. Improving infrastructure can be realized by improving information systems, perfecting business process, choosing suitable operational risk measurement methods, establishment of three operation risk management tools (RSCA, KRI, LDC). Optimizing environment includes perfecting corporate governance, perfecting the internal control, perfecting internal audit and keep good communication, etc. Third, the implementation of the plan for XY rural commercial Bank to strengthen operational risk management needs some measures to guarantee, such as improving operational risk management concept, ensuring the necessary resources of the implementation of operation risk management, strengthening the external supervision, perfecting the incentive and constraint, strengthening the construction of culture of compliance and so on.This article provides reference about improving operational risk management for other same type of financial institutions. It has a certain theoretical and practical value.