Research On Counter Operation Risk Management Of Jiangsu Branch Of ACB

As a risk-intensive,capital-intensive and technology-intensive institution,the banking holds a widely-recognized maxim that to manage the bank is to manage the risk.Operating risk is in a sense inherently with commercial banks.The banking industry in China,however,has long been in lack of the awareness of operating risks both in theory and practice.Furthermore,the theory,management and prevention of counter business operating risk(CBOR henceforth)has fallen behind for long.It is not until 2005 when China Banking Regulatory Commission issued a notice on enhancing operating risks management that commercial banks in China started attaching increasing importance to the risk management of counter business.Adopting an integrated perspective from theory to practice,this paper attempts to study the case of CBOR management of Agricultural Bank of China Jiangsu Branch(ABCJB henceforth)whose shareholding reform has already been well implemented.By collecting and reflecting on the related instances,this study is hoped to shed light on the prevention of existing and potential risks in ABCJB.This paper generally follows a logic order.It commences with the literature review and proceeds to present and analyze the current situation.It then proposes a possible scenario and ends with the implementation of it and its safeguard mechanism.Based on the literature review on operating risks and further the CBOR,this paper firstly explains and analyzes the concepts,features,taxonomy and forms of operating risks and CBOR in China.On the other hand,this paper also summarizes the management approaches to CBOR from theoretical and practical perspectives such as strategic management,corporate governance,internal control,organizational decision-making,process re-engineering and comprehensive risk management.In the next chapter,it retrospects the cases on CBOR losses and analyzes the current CBOR situation in ABCJB,with the purpose of finding out the risks and their possible internal and external causes as well as direct and indirect ones.Next,after a thorough consideration of CBOR influences such as management strategies,systems,culture,organization and both hardware and software facilities,it designs a scenario for CBOR management of this bank.Finally,it expounds the prerequisites for the scenario,which are full participation,managerial atmosphere,dynamic feedback mechanism,sufficient financial resources,to name a few.This paper contributes to a more in-depth understanding of CBOR and the comprehensive implementation of CBOR management in commercial banks in China.