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The research on the risk management of Chinese commercial banks under the new Basel Capital Accord

Author: WangHuanHuan From: www.yourpaper.net Posted: 2010-06-09 02:54:47 Read:

Abstract: after China's accession to the WTO, China's commercial banks are experiencing a hitherto unknown change.This change will make China's banks especially the four state-owned commercial banks are facing unprecedented challenges, with the financial universal characteristics of the mixed operation system will become the mainstream model of international financial industry.Therefore, the article points out, should change new situation, China's regulatory authorities should establish effective supervision to the new Basel Capital Accord as the standard.
Keywords: the new Basel Capital Accord; risk; regulatory

A, background and the Basel protocol of

Modern banking management is one of the central elements of risk management.In the risk management means the banks in raising funds and operating the process, to identify, measure and analysis of commercial bank risk, and on the basis of effectively extracting and disposal of risk, with the lowest cost to achieve maximum safety and security of the scientific method.The main risks of commercial banks operating include liquidity risk, interest rate risk, credit risk, investment risk and exchange rate risk.The banking industry as a financial intermediary, bearing the burden of capital market allocation. Occupy the position play a decisive role in the world economic system.A lot of theoretical and empirical studies show that, the robust and efficient banking system can ensure and promote steady economic growth.Think that classical economic theory. The market this "invisible hand" to guide free banking system running smoothly. Under the influence of traditional banking. There has been little under government intervention.In the new century. The purpose of commercial banks are experiencing a hitherto unknown change.This change will make the Chinese banks, especially the four state-owned commercial banks is facing unprecedented challenge, at the same time, to the financial universal characteristics of the mixed operation system will become the mainstream model of international financial industry, which brings a series of major issues worthy of deep consideration for China's banking industry: whether the current the financial system of China can be independent of the international trend and continue to adhere to the separate operation. After China's entry into the WTO. In different operating system. Chinese financial institutions, especially the state-owned financial institutions and international financial institutions can shed competition in an advantageous position.In this context, the effectiveness of the existing financial supervision mode of our country will face a severe test.
The Basel accord is a profound effect to the international banks supervision and management contracts, China has adopted the Basel accord. And based on the international competition after joining World Trade Organization face, uniform rules of commercial banks in China will gradually, is bound to follow the international bank management. Accept international banking supervision principles, standards and methods of the Basel agreement in principle.This will promote the comprehensive risk management to strengthen the banking of our country, improve the internal control system, improve the information disclosure system, and promote the standardization of supervision, the whole process, to ensure continuous and effective supervision.The Basel committee formulated and promulgated a series of regulations and suggestions for semantic piece. More and more become many national regulatory standards and guidelines.From the measurement of unification of international bank capital and capital standards (that is, "Basel agreement"), to the principle of management of interest rate risk, and then to the core principles of effective banking supervision and the 2000 introduction of the new capital agreement draft, became the symbol of authority of the consensus and the most important regulatory basis.
1 minimum capital requirements.The new agreement with credit risk, market risk and operational risk in the minimum capital requirements. And provides several options for the measurement of risk.Measuring the credit risk, the new agreement put forward two basic methods: standard method and the internal rating method.For the risk management level is low and some banks. The new protocol is proposed which uses the standard method to measure risk, calculation of bank capital adequacy ratio.When the bank's internal risk management system and information disclosure meet a set of criteria. Banks using the IRB approach.The IRB allows a bank to make capital requirements calculation method using risk elements calculation.The primary method only allows the calculation and each bank borrower is related to the probability of default, other values provided by the supervisory department; advanced rules to allow banks to calculate numerical other necessary.In the measurement of market risk and operational risk.The committee also provides a similar scheme for selection of different levels.
2 regulatory supervision and inspection.The regulatory authorities, supervision and examination is an important supplement to minimum capital requirements and market discipline, four principles of supervisory review: first, the bank should be a set of procedures in line with its risk of total capital assessment, as well as strategies to maintain capital levels, also have the bank monitoring and ensure the ability to meet regulatory capital ratios.If it is not satisfied for the final result, supervisors should take appropriate supervisory measures.Third, supervision authorities should hope that the bank's capital above the regulatory minimum capital ratios, and should have the ability to require banks to hold more than the minimum standard of capital.Fourth, the regulatory authorities should strive for early intervention to prevent the bank's capital falls below the minimum level required to resist the risk, if capital is not to protect and restore. Need to take remedial measures quickly.
3 market constraints.The Committee stressed. Market constraint has strengthening capital supervision. The potential role to help improve the safety of the financial system regulatory authorities, robust.The new protocol in the application scope, capital structure, risk exposure assessment and management program and the capital adequacy ratio of four areas to develop more specific quantitative and qualitative information disclosure.Regulatory authorities should evaluate bank disclosure system to take appropriate measures.The new agreement will also disclose into core disclosure and supplementary disclosure.The Committee recommended. Complicated solid international active banks should be a full public disclosure of core and supplementary information.The committee considered the best about the disclosure frequency of once every six months, the outdated meaningless disclosure information such as risk exposure, the best once every quarter, the bank disclosed information to explain its policies are not often disclosure.The Committee encourages the use of electronic means of channel of information disclosure.
The presence of two, our country banking risk supervision problem to
(a) the differences in risk management of large
China's modern commercial banking system has not been really established. This fundamental issue of Modern Corporation governance to further solve the legal system, the implementation of effective risk management required and the market regulation system also needs further improvement.The experience of commercial banks in western developed countries in terms of risk management. We can see, foreign banks are generally organized according to strict legal procedures of joint-stock commercial banks, they regulate the operation, with the perfect property right system and an effective incentive mechanism and constraint mechanisms, especially has a good corporate governance structure.The advantage of the system makes the foreign commercial bank risk control and management capacity has higher
(two) the risk management mechanism of the difference between the
Foreign commercial banks have formed a set of perfect system, in the aspects of risk management mechanism including: 1 risk screening system -- for the analysis of origin and cause of risk, risk types and hazard degree of distinction: 2 risk insurance system -- the main risk, transfer risk information and the establishment of risk database; risk decision system -- 3 the establishment of the principle of risk management, exercise, develop risk index and hedging functions; 4 risk hedging system -- the specific implementation risk aversion, redistribution or transfer of risk: 5 monitoring system -- a comprehensive supervision and control the whole process of risk management, and risk management assessment report.Sound and effective risk management mechanism is the foundation of the foreign commercial bank operation. It is also an important embodiment of bank safety principle.But it is weak in domestic commercial banks.At present, domestic banks are lack of risk management mechanism problems.
(three) there is a large gap in
risk management tools and techniques
At present.The international financial market, various financial derivatives emerge in an endless stream, financial innovation business to occupy an increasingly large proportion in the banking business; on the other hand, the financial risk and market uncertainties continue to enhance banking risk management is becoming more and more complex. However, domestic commercial banks far behind the western countries in the use of financial products innovation and financial instrument.A lot of foreign risk management tools and concepts have not yet in the risk management process of the domestic banking industry plays an important role in.
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