Banking Risk Management Exploration Based on Financial Engineering
|Keywords||Banking Risk management Financial engineering Stress test|
Banking is one of the important components of country’s financial system, it’s lifeblood of the national economy, and it’s also a high-risk industry. On one hand, banking risk management related to one country’s financial system security, economic security and even national security, on the other hand, it’s related to one country’s financial security, even stability of the world’s financial system and economic order. Asia Financial crisis happened during1997, on which year a large number of banks gone bankrupt. Then, banking risk measurement and control restart to being taken seriously. A more comprehensive risk management model being used by the top international banks, highly sophisticated risk measurement models followed, and then the competition among banks transfer to financial product innovation. By the end of2006, it’s also the end of Chinese banking transitional period after China became the member of WTO, geographic and customer restrictions were canceled for foreign banks. Along with economic globalization, market integration, and the process of asset securitization, Bank of China, Construction Bank of China, Industrial and Commercial Bank of China have been listed in China and Hong Kong one by one. The US subprime mortgage crisis happened during2007, and then the European sovereign debt crisis followed during2009. The domestic economy and finance were impacted directly by massive speculative international capital. Financial security and economic importance of safety in extreme forms show in the world, banks’ risk management is particularly important.This paper is based on the rapid development of modern banking situation, in the background of lack of in-depth systematic study risk management practices, follow the combination ideas of theoretical research and empirical analysis, qualitative analysis and quantitative analysis. According to the "New Basel Accord", learn comprehensive risk management experience from Europe and America Commercial Bank, explore the world leader in risk measurement and assessment models. Industrial and Commercial Bank of China as an example, on the In-depth analysis based of conventional financial instruments inherent flaws, In-depth exploration of China’s commercial banks connotation of comprehensive risk management system, features, architecture and its problems, Proposed risk assessment innovation paths to safeguard national financial security.In this paper, it’s based on a comprehensive risk management of financial engineering, It will provide theoretical guidance and policy support for the healthy development of Chinese banking.