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On the commercial bank risk management in the context of the financial crisis

Author: BoShuHui From: www.yourpaper.net Posted: 2010-06-14 00:54:04 Read:
Paper Keywords: risk management of the financial crisis
Abstract: This paper describes the risk management of commercial banks, and analyzes the status quo of China's commercial banks risk management as well as the impact of the U.S. financial crisis on China's banking industry, and discusses how to strengthen China's banking industry during the financial crisis risk management countermeasures.
Enterprises, commercial banks as special financial enterprises engaged in asset unravel the camp, its main source of funding liabilities, the bank is a business risk management of deposit money banks, risk management has always been Fu Note. Risk management is not a means to eliminate the risk, in fact, the risk is no place to escape and hide, the key is to learn to control and manage financial risk. Walter Wriston, the former chairman of Citigroup said something quite philosophical: all of life is to manage risk, but to eliminate the risk of risk management refers to a certain level of risk, and maximize the return on that keep risk and the balance of the proceeds, profit benefits to offset the loss of all the risks, as well as setting a certain risk, which is the core of the bank's risk management. 2004 "The New Basel Capital Accord" bank risk into credit risk, market risk, operational risk three main types of risk and other risks. Credit risk is the most important risk facing banks, refers to the risk of non-performance of the Bank's customers or counterparties. Market risk is due to the financial markets ... some of the important variables (such as changes in interest rates, exchange rates, stock prices, etc.), and led to the bank's position facing the risk of loss. Operational risk refers to the risk of failure caused the defects of the bank's internal controls, information systems and corporate governance mechanisms, such risks and other risks, including liquidity risk due to human error, system failure, incorrect processes and ineffective oversight causes , country and transfer risk, legal risk and reputation risk, the various risks faced by the bank in business development, cross each other, and showing a chain of state.
First, China's commercial banks risk management problems exist
Credit risk management
Cambodian sources of business income of China's commercial banks is that the deposit and lending interest income, According to incomplete statistics, the deposit and lending interest income accounts for about nationwide to about 70% of the bank's annual revenue. In this case, the credit risk straight since become the main risks faced by the commercial banks. Our credit risk is not to achieve a dynamic rating, loan classification, the current implementation only classified by period, still belong to the static method, but there may be the single loan the borrower is not credit risk, but the overall risk of the borrowers of all loans ; former 'pen payment risk not loan risk; insignificant risk yesterday, today the risky situation. Commercial bank loans before the borrower to take the comprehensive credit rating unified credit, but it is still difficult to monitor changes in the credit status of the borrower loan. Credit funds to a lack of monitoring, lack of commercial banks on the scale of credit funds, capital flows, the effective monitoring of the daily efficiency, and high-risk behavior of borrowers unable to bank observed, and so the bank informed the excessive use of credit funds risk often the risk of loss of fat cattle. At present, China's commercial banks have not really establish their own credit risk measurement model, the credit risk of the credit assets evaluation based small banks own subjective judgment.
Market risk
Market risk management of commercial banks has just started, the management level is not high, the lack of professional talent. A long time, due to the implementation of interest rate controls and relatively fixed exchange rate system, China's commercial banks focus on credit risk management of credit assets, the lack of attention to market risk. With the advance of RMB interest rate market, interest-bearing deposits and loans increasingly market-oriented, fixed rate mortgage and other interest rate fixed ridicule increasingly common, the risk of interest rate gap will gradually increase. And the RMB exchange rate formation mechanism reform, speeding up the exchange rate volatility gradually enlarge the exchange rate risk has been showing. The same time, the size of the trading business gradually expanded fire will gradually increase its market risk, in particular the development of the grain market of financial derivative products, the market risk faced by the commercial banks will be larger and more complex. Commercial banks still can not completely meet the increasing requirements of the market risk, market risk measurement methods, tools, systems, especially in the lack of effective measures.
3 operational risk.
Operational risk, though the recent management of hot, but China's commercial banks operational risk also failed to have a comprehensive understanding of the system, in terms of the operational risk management philosophy, operational risk management system, or operational risk management tools, there are great defect, which has become a major obstacle restricting the operational risk management of commercial banks. Second, the impact of the U.S. financial crisis on China's banking industry
A direct loss caused by the mortgage crisis on China's banking industry is small, the indirect impact should not be underestimated, in which the 'banks' bad loan ratio rose. The subprime mortgage crisis has led to generalized slowdown in world economic growth, credit risk, to be manifested in two aspects: First, the export prices of declining demand, textile, steel and other export-oriented enterprises, and the pressure of cyclical industries and enterprises have fallen sharply. However, the export enterprises in the total bank credit proportion is not high, formed a lower proportion of non-performing loans, the overall impact on the quality of bank credit is limited. SMEs affected by the economic slowdown and the tightening of monetary policy, financing difficulties, shortage of funds is very prominent, coupled with the appreciation of the renminbi, and external demand factors, some SMEs even in the face of a crisis of survival. SMEs traditionally funded bank lending focus, so the actual credit risk to the banking sector is relatively limited. Commercial bank QDII investment products range is limited to fixed-income products, market risk subprime mortgage crisis.
Third, China's commercial banks risk management countermeasures
1, establish risk prevention and control concepts, enhance awareness of risk management
Commercial banks ... the core of a country's financial and economic, commercial bank operating a direct relationship with a country's economic stability. Financial institutions must strengthen risk awareness and improve the management system, standardize the operation and management of its operating principle must be standardized prudent. Asked some time before the outbreak of the U.S. subprime mortgage crisis, some financial institutions have found the problem, but not enough due to risk prevention and management awareness, interest-driven, no measures. Commercial Bank in the risk management process, it is necessary to enhance awareness of risk management. Especially with the increasing cooperation and competition between the foreign commercial banks and commercial banks in China, China's commercial banks in the international financial field continue to depth and try to open up overseas' markets. The face of the international financial market is full of opportunities and challenges, China's commercial banks in the investment process to continuously improve the response to the risk awareness.
2, a comprehensive implementation of the New Basel Capital Accord
Commercial banks in risk management 'straight focus only on credit risk management, to the neglect of market risk and operational risk. The implementation of the New Basel Capital Accord ", the three types of risk into the unified framework for capital regulation is an inevitable choice for China's commercial banks effective risk management. In June 2004, the Basel Committee on Banking Supervision published "The New Basel Accord", one of the three pillars is to ask commercial banks' capital adequacy ratios must reach 8%, and the core capital adequacy ratio shall not be less than 4%. March 1, 2004, issued by the China Banking Regulatory Commission and the implementation of the "Measures for the Administration of the capital adequacy ratio of commercial banks, Chinese commercial banks to January 1, 2007 must reach the required capital adequacy ratio. Therefore, China's commercial banks to achieve a capital adequacy ratio and achieve the goal of profit maximization, business objectives as a commercial bank and an important means to improve competitiveness.
3, strict credit, and to strengthen credit management
First, the source of repayment should be a primary consideration in addition to the focus on liquidity risk management, the Bank for the management of client cash flow, H-mouth concern for the customer first source of repayment Always be placed first in the credit management. Screening to determine the customer's expected cash flow through effective investigation and review, wary of asset price bubble burst as the fundamental basis of the loans, the impact on the quality of bank assets. Second IE indeed treat the second source of repayment, acquisitions NPLs, the bank collateral rights a short period of time to achieve control of the business right. Separate operation of the market environment, the risk transfer mechanisms and tools are relatively limited, the second source of repayment is the focus of attention in the bank credit process. However, the long-term bank credit assets and market a strong cyclical often difficult to match the market rises, the prosperity and the tragic fall often so that exposure to the bank, especially fit in, to be alert to the inflection point of the economic cycle, the austerity policy
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