Keywords: commercial banks; Risk internal control mechanism; explore
China Library ClassificationNo.: F062 Document ID: ADAI:10.3969/j.issn.1672-0407+02.06.003.
Article number:1672-0407 (2012) 06-005-02 Date of receipt: 20 12-03-25.
Nowadays, China's major commercial banks have established a relatively complete risk internal control mechanism according to their own characteristics. However, due to the limited level of China's current economic stage and the particularity of the short development time of commercial banks, in some aspects, the level of internal control mechanism of commercial banks in China is not as developed as that of foreign countries, and the slow effect and difficult implementation have become the current development status of commercial banks in China.
First, the risks faced by the internal control mechanism of commercial banks.
credit risk
At present, most commercial banks in China have adopted the flexible mechanism in their credit business. This elastic mechanism is just right, which is reflected in two aspects. On the one hand, personnel at all levels strictly implement the responsibility system for loan management, set up the operation and management of credit business according to the principle of "separation of loan examination and grading approval", and clarify their respective responsibilities and authorities. In view of all kinds of risks that may occur in the loan business, a perfect credit risk early warning system and a flexible emergency mechanism are established. The system can timely and effectively feedback the quality of credit assets and various events that may affect the operation of banks, thus prompting decision makers to formulate practical measures at the first time. On the other hand, the firm communicates and coordinates with the superior head office or central bank in time, expands the scale of credit business if possible, speeds up the capital turnover and achieves greater benefits.
(2) Transaction risk
Commercial banks also attach great importance to their own transaction risks. Transaction risk control includes interbank lending and foreign exchange trading. Commercial banks strictly control the objects, term contracts, the proportion of lending funds and their uses in their daily business.
(C) Information system risks
The development and maintenance of information system is the most important part of the whole banking system. It is precisely because the information network system established by the bank itself is used to handle grass-roots operation business conveniently and quickly, so the information system is particularly important.
Second, the importance of risk internal control mechanism of commercial banks
(1) Specific beneficiaries of risk internal control mechanism of commercial banks
First of all, the first beneficiary of the risk internal control mechanism of commercial banks is the banks themselves. The ultimate goal of effectively implementing risk internal control is to avoid risks or reduce losses caused by risks and ensure that the economic interests of enterprises are not eroded. Commercial banks can get huge economic benefits while avoiding risks. This is very important for profit-oriented enterprises.
Secondly, the risk internal control mechanism of commercial banks indirectly benefits customers of various businesses of commercial banks. Commercial banks do a good job of risk internal control, which not only benefits themselves continuously, but also ensures the interests of customers. The source of funds for banks is mainly customers who come to handle deposit business, and the destination of funds is generally customers who handle loan business and some investments of banks themselves. However, when there is a liquidity crisis due to poor bank management, customers who handle deposit business feel the greatest crisis. The risks suffered by banks themselves, such as non-performing loans, will lock up the customers' funds in the deposit business and even cause financial losses.
Thirdly, the risk internal control mechanism of commercial banks is also beneficial to other commercial banks. Because all banks of commercial banks have business dealings, such as interbank lending and foreign exchange trading. Therefore, the business crisis of a commercial bank may spread to all commercial banks with which it has business dealings, resulting in the weakening of the liquidity of a large number of funds. Various high-risk operations such as packaged loans and mortgage loans also highlight the risks between commercial banks. However, this kind of exchange and cooperation has also promoted the integration and standardization of risk internal control of commercial banks. Urge commercial banks to establish and maintain risk internal control mechanisms and enhance their ability to cope with risks.
Finally, the risk internal control mechanism of commercial banks makes the whole social economy run normally. The risk internal control of commercial banks directly affects the operation of commercial banks, and whether commercial banks can operate normally also involves their customers and other commercial banks. These are the main participants in the normal production and operation of society. In other words, if the risk internal control of commercial banks is seriously ineffective, it will first lead to the bankruptcy of commercial banks, and then lead to the serious crisis of large and small customers and other commercial banks, and even lead to social and economic instability or even temporary paralysis. Therefore, it is particularly important to establish the risk internal control mechanism of commercial banks.
(B) The inevitability and practical significance of the risk internal control mechanism of commercial banks
Risk internal control mechanism is a necessary factor for the survival and development of commercial banks. The reason why commercial banks make profits and attract customers is because they control risks. The profits of commercial banks need risks. As we all know, the main profit source of commercial banks is the deposit-loan spread, which is obtained by taking the risk of not collecting loans. As a "converter" in business, commercial banks turn risks into profit channels. It takes risks, transforms risks, and implants risks into financial products and services for reprocessing. Risk is a "double-edged sword" for commercial banks, which can not only bring huge profits to banks, but also be the main reason for losses. If the management is slightly improper, the risk will erode the profit shareholders of the bank. Investment can not get the expected return. In severe cases, risks will further erode the capital of banks, and in extreme cases, banks will go bankrupt. Therefore, risk internal control is the basic function of commercial banks, and it is also a necessary factor for their survival and development.
Risk management is the core of financial supervision. Banking is a high-risk industry, and its development not only requires commercial banks to follow the principle of prudent operation, but also requires financial regulatory authorities to put risk management in the first place in supervision. Nowadays, both internal and external regulators put the risk control of commercial banks in the first place. Even the Basel Accord regards capital adequacy ratio, government supervision and market restraint as three pillars. These three pillars are all centered on risk management and supervision, which shows that the international community attaches importance to risk control.
Third, improve the risk internal control mechanism and methods of commercial banks in China.
(A) to build a self-restraint risk control mechanism
The ultimate goal of the internal control mechanism of commercial banks is to achieve effective risk control. In the process of pursuing effective control, the most important thing is to choose an effective risk control mechanism, and the core of self-restraint is capital restraint. Economic capital directly reflects the risk status of banks through the calculation and prediction of unexpected losses. As we all know, economic capital is the capital used by the whole bank to maintain its operations, such as investment and construction, and it is also the most important source for banks to survive in their operations. The constraint of economic capital can bring a safe operating environment and strategic support to banks. In internal control, we should consciously use the concept of economic capital, give full play to the role of capital allocation in bank risk control, and make enterprises form a stable incentive and restraint mechanism.
(2) Improve the organizational structure and rules and regulations.
As an industry more susceptible to risks, commercial banks need the same organizational structure and rules as other enterprises. Because of the particularity of the bank itself, this organizational structure and rules and regulations of the banking industry need to be rigorous and perfect. Whether it is grass-roots staff, senior leaders, back-end support departments and logistics support departments, they should be clear about their responsibilities and purposes, and at the same time clarify the relationship with other chain departments. Only in this way can the whole bank operate in an orderly and effective manner and ensure that the operational risks are minimized.
(C) the establishment of regular supervision and feedback system
It is not the establishment of a reasonable organizational structure and rules and regulations that will enable banks to operate smoothly. Sometimes the macro-policy orientation will make the bank's business direction fine-tune. When the organizational structure can't be changed in time and effectively, the supervision and feedback system will issue an early warning to urge all departments to make appropriate and timely adjustments. Therefore, the supervision and feedback of effective risk internal control mechanism will promote the organizational structure and rules and regulations to play a role. At the same time, this kind of supervisory feedback can constantly expose problems arising from other aspects so that the management can correct them in time.
(D) the implementation of scientific and reasonable separation of duties.
Separation of duties refers to business separation, in order to avoid making a staff member take on multiple incompatible duties, thus causing potential internal risks such as errors and fraud. The purpose of separation of duties is to avoid fraud or mistakes caused by multiple people doing the same job partially or repeatedly, and at the same time to find such events in time, such as accounting audit, loan review and approval.
(5) Implementing limited business authorization.
Authorization refers to the right granted by the board of directors of the bank to the management and its subordinate institutions and staff to engage in various businesses or certain businesses on behalf of the bank. All employees should strictly abide by the authorization rules and conduct business only under authorization. Commercial banks should adopt different degrees of authorization for different businesses and different links to avoid losses caused by fraudulent acts caused by excessive authorization. Each link should be authorized with the goal of ensuring the effective operation of business decisions, the effective implementation of management systems and the implementation of rights checks and balances.
(6) Cultivate a corporate culture with risk awareness.
Corporate culture is a kind of ideological values and the core value of the enterprise recognized by all employees. Every business of a commercial bank revolves around risk analysis, evaluation, monitoring, transfer and decomposition. As the builder and executor of the system, people are the basis of internal control. Only by giving full play to people's initiative can people consciously realize the internal control management objectives.