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Re-classification and its management on the risks of commercial banks


The Keywords: risk classification; environmental risks; the main risk; object of risk; risk management in this article are collected by the Chinese papers Alliance WWW.LWLM.COM. As the basis of risk management, commercial banks need to risk source, nature, evolution and the possible consequences of understanding. Among them, the classification of the various risks according to certain criteria can be scattered all kinds of risks linked to understanding one of the principal contradiction. A proper classification can fully understand the risk characteristics, targeted to various risk management. Awareness of the risk, the risk classification is a process of change, its essence is constantly updated of the risk criteria for the classification, this update is changing by the commercial banks operating environment, the continuous deepening of the awareness of the risks. Different from the traditional risk classification, this paper presents a new risk classification framework, and in this framework to study how to improve risk management of commercial banks in China. Risk causes one, a new risk classification framework commercial banks on the one hand the objective economic environment from which, on the other hand from the commercial banks of the subjective factors, as well as enterprise business relationships with banks objective factors and the public. Therefore, in accordance with the direct cause of lead to bank risk, bank risk is divided into environmental risks, the main risk, and the object of risk. (A) objective economic environment the risk commercial bank risk environment, including macro and micro aspects. Including the risk of national economic and financial policies, the economic system risk, currency risk, the risk of administrative intervention, financial laws and regulations, risk, interest rate risk, the risk of balance of payments, the social credit environment risks and inter-bank competition risk. The (b) the main the risk the main risk is the risk of commercial banks as a special enterprise carrying on money, self-management and other aspects. It mainly includes the capital risk, liquidity risk, operational risk, management risk and operational risk. (C) of the object in risk commercial banks to the object of risk is the risk to public confidence in banks and enterprises have a direct business contacts with commercial banks, department or individual's own risk to the bank to bring the inevitable risks. It mainly consists of public confidence in banks, the operational efficiency of the borrower, the borrowing enterprise industries in which the risk of the borrower to ensure the risk of the degree of capital position risk of the Borrower and the Borrower in which the industry boom and other factors. Two new risk classification framework, the status of the commercial banks' risk management analysis new risk classification provides a framework for the analysis of the risks currently faced by the commercial banks in China, allows us a new perspective investigated the status quo of China's commercial banks' risk management. (A) of the Environmental Risk Management 1. Macroeconomic environment. The macroeconomic environment continues to reflect the particular stage of development of the economic cycle, and continue to affect a variety of business environment. At present, China's macroeconomic environment has the following features: First, China's economic development increasingly international economy, in the process with the world economy, international economic uncertainty began to affect the national economy, China The economy will become more and more by the world economic cycle, including the international financial market. Accession to the WTO five-year transition period will soon be past, international financial institutions will seek to enter the China market, the financial risk of the condition, the formation mechanism and performance characteristics will be more complicated, there may be endogenous change the conditions of an external interaction high-growth risk. Second, China's economic development and increasing uncertainties. China's system of property rights, business system in the event of profound change in the business life cycle, increasing uncertainties in the prospects for development. Market regulation is not sufficient, the extensive economic development, national economic structure of the unscientific and unreasonable part of the development of the industry is not standardized, unhealthy, the rapid growth of investment and redundant construction develop in parallel. Since 2003, investment in fixed assets have been expanding, the obvious overheating of the steel, cement, aluminum, and real estate industry, including bank loans played a role in fueling. Historical experience shows that the overheated investment is often accompanied by credit overheating, once the market needs change, the economic situation is reversed, and a lot of credit is often necessary to form a large number of non-performing assets. Phenomenon in the credit environment, property right system reform and construction started soon, reputation in the market mechanism does not give full play to the role of the legal environment is not sound social credit system has not been established, swindling the community, and lose the trust of Repudiation occurrence of financial fraud, borrowers avoiding the debt frequent cases. The absence of external credit system, coupled with the asymmetry of information, the commercial bank is difficult to carefully analyze the borrower's true credit level, which often leads to a lack of commercial banks own risk analysis based on loans, the financing of listed companies, real estate finance to support the private economy, and even consumer loans, are reflected in the herd phenomenon of the situation, and the ultimate evasion of debts due to the frequent occurrence of the borrower, the Bank of the rapid expansion of the assets into non-performing assets. 2. Financial market environment. Commercial banks in which financial markets can be said is the most direct impact on the environment of the bank, a sound financial market can effectively resolve the risks faced by commercial banks. As a developing country, China's economic development has the characteristics of the In the early stages of development, select bank-based, not market-oriented financial system with the objective necessity, but this necessity is implicit in many of the financial market uncertainties. In our country, first of all, serious financial market development is not balanced, the high proportion of indirect financing, financing structure is too simple; the pace of development of direct financing has been slow, still not commensurate with the pace of development of China's economy. Among them, the equity financing in 2000 reached the highest peak, the proportion accounted for 12.6% of the total financing, after they have been showing a downward trend. Indirect financing in bank loans has been in large-scale high-speed expansion. An important indicator of financial stability is the community as a whole financing structure over-reliance on banks. 2001, 2002 bank loans accounted for the proportion of corporate loans were 75.9%, 80.2% and 81%, more than 90% in 2004, much higher than the indirect financing in the financing pattern of the financial markets in developed countries and only 40% The following ratios. This financing structure makes corporate finance relies heavily on bank loans based indirect financing, and the original can be resolved through the field of direct financing and the dispersion of credit risk over-the commercial banks focused. Second, China's financial markets, the lack of an independent enterprise and individual credit evaluation system, the social credit environment there is no purification system, the credit risk to commercial banks, the excessive accumulation and risk management more difficult case, relying solely on commercial The bank itself on the level of risk management and management capabilities to control the whole society of more than 90 percent of credit risk, banks should bite the bullet. With the acceleration of the transition process of economic development, commercial banks are facing the difficulty and complexity of credit risk management is increasing. (B) the main risk management status quo in main risk comes from the problems of the commercial banks to their own organizational structure defects, the operating mechanism is not scientific, management mistakes and even the corporate culture. Operational risk is typically the main risk due to internal mismanagement. Since the commercial banks since 1994, now the joint-stock reform, a central issue is to establish a sound, a sound corporate governance structure. Sound corporate governance structure can form an effective internal control mechanisms to resolve the risks posed by their own problems. Compared with the well-known foreign commercial banks, domestic commercial banks' risk management level there is still a wide gap between internal control weakness is a common outstanding problems. Cases occurred in recent years has fully exposed the domestic commercial banks' internal control defects, such as the lack of a system of internal control system and proactive risk identification and assessment mechanism, fragmentation of internal controls, intermittent supervision and inspection of links does not in place, the lack of internal control the driving force for continuous improvement. Weak link of internal control is an important reason to cause the main risk. (C) of the object Risk Management the object risk is the risk arising from the commercial banking business objects for their own reasons. This risk, commercial banks should have an effective screening mechanism to determine the credit status in order to control risk. In China, due to the lack of external credit rating system for corporate or personal risk only by commercial banks to control. All along, the loans of banks attach importance to policy,ralph lauren polo, legality, and the loan to run security, or rely on the traditional financial statements submitted to the analysis, field investigation, focusing on qualitative analysis, compared with the foreign risk management, risk management quantitative analysis means lack of a reliable, quantitative credit analysis and decision system, risk identification, measurement is still very imprecise. The ideas new risk classification framework to manage the risks of commercial banks to establish a comprehensive risk management system is a basic platform of the commercial banks to manage various risks. From a regulatory perspective, the development trend of today's international banking supervision is risk-based regulatory concepts and methods from specific business activities of the monitoring of banks to urge banks to establish and improve the risk management system, to ensure that banks in accordance with the precautionary principle business, effectively manage and control risk.