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Causes and prevention of risks in state-owned commercial banks

[Paper Keywords] risk prevention of commercial banks

Abstract: Commercial bank risk is one of the manifestations of financial risk, which is related to national economic stability and financial security. Under the background of shareholding system reform, especially after China's entry into WTO, the risk prevention of state-owned banks is particularly worthy of attention. On the basis of defining the risks of commercial banks, this paper analyzes the causes of the risks of state-owned commercial banks in China, and puts forward some suggestions on preventing and resolving the risks.

State-owned commercial banks are the main body of China's financial structure system. Risk problem has a long history. Under the background of shareholding system reform and China's entry into WTO, it is particularly important to guard against the development of commercial banks.

First, the definition of commercial bank risk

The risk of commercial banks is a form of financial risk. Because commercial banks are in an uncertain environment, coupled with the defects of internal systems and the exposure of loopholes in management, the value of banks may depreciate or their income may be lost. The nature of commercial banks' currency operation leads to high risks in every business, including taking deposits, issuing loans, launching derivative financial products and developing intermediary business. To a great extent, the risks of commercial banks stem from their own management shortcomings, which are ignored or not cured, and continue to accumulate and deepen, and may lead to crises under the stimulation of external risk environment.

The new Basel Accord clearly classifies the operational risks of commercial banks, including credit risk, market risk, operational risk and liquidity risk, which are independent of each other and can usually be transformed into each other. The risks of commercial banks are mainly manifested in the following aspects: first, the proportion of banks' own capital does not meet the requirements; Secondly, the internal management is poor, the credit management level is low, the internal control is not perfect, the illegal operation is common, and even the phenomenon of misappropriating public funds and absconding with money appears; Thirdly, the deposit reserve ratio is low, and once depositors squeeze deposits, banks will have a payment crisis; Fourth, the loan examination and approval system is not perfect, the loan defaults at maturity, or the bank's non-performing assets are unable or unwilling to repay, and the profitability is reduced. Customers can make preliminary judgments according to some index systems of banking activities to warn the risks of banks and reduce losses.

Second, the risk analysis of commercial banks

The causes of commercial bank risks are various, including internal factors and external environmental factors. The internal causes of bank risks are generally easy to control and manage, while the external environmental factors are generally difficult for a single bank to control: however, the signals sent by the early warning system can be used to adjust the business strategy. To sum up, the risk causes of commercial banks mainly include

1. The capital adequacy ratio is low and the ability to resist risks is weak.

The capital risk of new commercial banks after the shareholding system reform in China is not prominent, while the state-owned commercial banks have serious capital risk and weak anti-risk ability due to the influence and restriction of many factors. From the perspective of supervision, capital adequacy ratio is an important guarantee for bank safety. The smaller the capital adequacy ratio, the greater the risk and the worse the security, because the smaller the ratio of capital to assets, the less the ability to replenish assets in the event of loss. In order to strengthen the safety of bank operation, the Basel Accord stipulates that the capital adequacy ratio of banks shall not be less than 8%. Among the four state-owned commercial banks in China, China Bank has the highest capital adequacy ratio. In 2002, its net capital was 188 179 billion yuan, slightly higher than that in 20061827.9 billion yuan, but its total weighted assets increased from 220 1020'fZ to 20. Therefore, the capital adequacy ratio decreased from 830% to 865,438+05%, while the capital adequacy ratio of China Industrial and Commercial Bank decreased from 576% and 5438+0 in 2006 to 554% in 2002.

In June 2004, the State Council approved the use of US$ 45 billion in foreign exchange reserves to inject capital into China Bank and China Construction Bank. In June, CCB and BOC signed an agreement with Cinda Asset Management Company to hand over non-performing loans of 654.38+0.298 billion yuan and 654.38+0.498 billion yuan to Cinda Company respectively. This is a large-scale capital injection by the government, which has enabled CCB and BOC to reach the capital adequacy ratio of 8%. In addition, it is difficult for banks to retain their own profits because of the low level of profits. Under the condition of insufficient capital replenishment, the consumption and loss of capital are becoming more and more serious, mainly manifested in the increase of non-performing credit assets and the depreciation of fixed assets.

2 poor internal management. Poor awareness of risk prevention

The risk of commercial banks is largely the accumulation of internal management problems. Poor management is mainly manifested in weak risk awareness, lack of comprehensive risk management and imperfect internal control system.

Judging from the reasons for the formation of non-performing loans, the bank's system of "paying more attention to loans than management" and "three inspections" is a mere formality, and the pre-loan investigation is not detailed, the review is not strict, the post-loan inspection is weak, and there is a lack of dynamic tracking and monitoring. In the internal control system, the internal authorization credit system, the loan approval system, the issuance system of letters of credit and acceptance bills, etc. Is ineffective and difficult to implement. Even some employees are outside the internal control system, misappropriating public funds by taking advantage of their powers, and even absconding with money.

Commercial banks have not established a modern enterprise system, and they do not pay enough attention to risk and management in their operations. Commercial banks are not sensitive to the changes of external economic environment such as interest rate, stock market and economic situation of neighboring countries, and their ability to cope with risks is poor.

3. Single profit model and low insurance level.

The main income source of state-owned commercial banks in China is spread income, and the proportion of intermediary business is small, which can only provide less banking services and products, and the profit source is single. The traditional products and business income of state-owned commercial banks account for more than 80% of the total income, which has the characteristics of single product, homogeneity and similar outlets. Intermediary business and personal business are underdeveloped. The proportion of intermediary business income in total income of domestic commercial banks is 8% on average, the highest is 17%, and some are even less than 1%. However, the intermediary business income of commercial banks in developed countries has become an important source of their operating income. According to statistics, the proportion of intermediary business income in the total income of American commercial banks has risen from 30% in the 1980s to 384% at present.

The main business of China's commercial banks is the traditional deposit and loan business, and the profit space is small. This single profit model may lead to a vicious circle in which banks often issue a lot of loans to win customers in order to meet performance requirements. Relaxation of credit review standards leads to an increase in non-performing assets, which has hidden dangers for banks. In addition, the profit of this model is influenced by the macro-control of interest rate control by the state.

Three. Ways for commercial banks to guard against risks

1 Carry out the shareholding system reform and improve the corporate governance structure.

Joint-stock system is the inevitable product of highly developed market economy, the most representative property right system and enterprise organization form in modern times, the best choice of bank property right mode under China's market economy system, and it should be the main direction of property right reform of state-owned commercial banks. The shareholding system reform can improve the corporate governance structure, solve the problem of owner vacancy, effectively straighten out the relationship between state-owned property rights, reposition its relationship with relevant state departments, and completely eliminate administrative intervention. As a major shareholder, the state can only play the role of shareholders.

While carrying out the shareholding system reform, we can make full use of the opportunity of the development of China's capital market and raise funds through multiple channels in the capital market to solve the problems of single source of funds and insufficient capital of commercial banks. At the same time, banks can try to participate in market transactions within a certain scope and scale, improve asset structure, improve asset quality, and achieve the best combination of profitability, liquidity and safety.

2. Strengthen the internal system construction and carry out comprehensive risk management.

Commercial banks should strengthen their own system construction, constantly improve their management level, and eliminate the breeding ground for illegal operations. Including the establishment and improvement of incentive and restraint system, internal audit system, internal control system, personnel system and risk management system.

Risk management is the core of bank management, which is based on rich business data, scientific management mode and high-quality experts, including risk identification, measurement, control and monitoring. At present, many foreign banks have begun to use the new generation risk measurement model. The Risk Management Department uses VARN to calculate market risk, track credit risk, analyze the relationship between income and business volume, calculate marginal income and default probability, and determine the reserve amount and allocate economic capital accordingly. After China joined the WTO, the interest rate and exchange rate management system was gradually liberalized, a large number of financial derivatives appeared, and the risk exposure of banks increased. This requires China's commercial banks to take countermeasures as soon as possible, bring credit risk, market risk and operational risk into the scope of comprehensive risk management, make overall planning, make preparations from organization, technology and personnel, and gradually implement the all-round risk management model.

3. Expand the business scope and change the profit model.

At present, more and more enterprises are directly financing through the capital market. The customers of commercial banks are constantly losing. Banks urgently need to change the profit model based on traditional deposit and loan business, and must expand their business scope, carry out business innovation and vigorously develop intermediary business.

First, fully promote the development of international business. After China's entry into WTO, the internationalization of China's economy and finance has been continuously improved. Joint-stock commercial banks must seize the opportunity, strengthen the development of international business, tilt their operating resources and management resources to international business, and promote the rapid development of international business. The second is to promote the diversified development of charging business. Banking belongs to the service industry, and charging for its own services is the basic requirement of market economy, which is also in line with international practice. However, commercial banks in China do not charge for many businesses, which seriously affects their income ability. The Interim Measures for the Administration of Service Prices of Commercial Banks promulgated in June 2003 provided a clear legal basis for the service charges of commercial banks. The third is to innovate customer financial management tools and channels. Financial management on behalf of customers is an important intermediate business of commercial banks, which is the concrete embodiment of the service function of commercial banks. With the continuous improvement of residents' income level and financial management consciousness in China. The enhancement of investment awareness and the growing public desire for financial management have laid a good customer base for the development of personal financial management business of joint-stock commercial banks.

In addition, while preventing the increase of non-performing assets, commercial banks should broaden their thinking, solve the stock of non-performing assets and prevent the credit crisis caused by the deepening of banking reform.