1, due diligence

Mainly responsible for the approval of loans (here, loans in a broad sense, trade financing, foreign currency guarantees, letters of credit, etc. Both belong to the management of "loans" and credit lines. Generally speaking, due diligence is only for corporate customers with a large amount. Many city commercial banks will have different products and services for small and medium-sized enterprises, and the small amount will not be audited by the air duct department, and the credit rating method is slightly different. Due to the consideration of lending efficiency, small and micro enterprise loans (generally less than 654.38+0 million) do not need to be reviewed by the Air Duct Department of the Head Office.

For a better understanding, the following figure shows the process of bank lending: 1. Customer rating and customer limit. Customer limit means that for the same enterprise, annual management is adopted instead of a single credit line, that is, the first trial is conducted once a year, and the annual maximum limit is obtained. If the collateral undergoes major changes or invalidation, or the annual maximum limit is to be increased, the number of annual inspections shall be increased.

1) The account manager will collect the financial information, business management and industry development information of the customer (through the financial statements of the customer and the database purchased by the bank, etc. ) calculate the default probability PD value of the customer (system calculation) and find out the corresponding customer registration;

2) Conduct pre-lending investigation, including relevant debt information (including debt structure, collateral information and guarantor information), and calculate debt loss (LGD) in case of default;

3) The system has PD and LGD, which calculate the tone loss of debt, the occupied credit risk economic capital, the risk-adjusted return on capital of debt, and the RAROC of the customer's overall business, and give the loan pricing according to the minimum return on capital required by the bank. On this basis, the examination and approval personnel of the air duct department consider the risks and benefits and examine and approve the debts;

4) Post-loan management: after the loan is issued, detect, warn and report the deterioration of customer's credit rating and negative EVA.

2. Risk monitoring

Generally speaking, it is what we call comprehensive risk management, and the scope of monitoring includes credit risk, market risk, operational risk, liquidity risk, reputation risk and compliance risk. In many cases, it is mainly responsible for submitting statements and reports on major issues to the CBRC.

However, liquidity risk, reputation risk and compliance risk may be borne by other departments, such as the Financial Markets Department, the Internal Audit Department and the Compliance Department.

The following is an explanation of various risks:

1) Credit risk: the risk that the debtor or counterparty fails to perform the obligations of financial instruments or the credit quality changes, which affects the value of financial instruments and thus brings losses to creditors or holders of financial instruments, including default risk and settlement risk.

2) Market risk: refers to the risk that adverse changes in market prices (interest rates, exchange rates, stock prices and commodity prices) lead to the loss of on-balance sheet and off-balance sheet business of banks. Including interest rate risk, exchange rate risk, stock risk and so on.

3) Operational risk: the risk of loss caused by imperfect or invalid internal procedures, personnel and systems or external events. For example, employees collude with the outside world, the system does not meet the regulatory requirements, the information system is interrupted, and business is interrupted due to natural disasters.

4) Liquidity risk: the possibility of loss or bankruptcy due to failure to provide financing for the reduction of liabilities and the increase of assets.

5) Reputation risk: Reputation risk refers to the risk of negative evaluation of commercial banks by stakeholders due to the operation and management of commercial banks or external events.

6) Compliance risk: the risk that a bank may be subject to legal sanctions or regulatory penalties, major financial losses or reputation losses due to its failure to "comply".

All the above definitions come from CBRC or Basel Committee.

If you have prospects, you agree with the first answer. Different positions, different banks, different bank risk preferences, different personal development will be very different. Generally speaking, my impression is that business departments, such as corporate finance department, financial market department and trade finance department, have a higher position in city commercial banks because these departments can directly bring benefits. Of course, with the increase in the scale of bank assets, the CBRC will also increase its supervision accordingly, and the regulatory requirements for various risks of banks will be stricter.

In fact, a lot of work in the air duct department of city commercial banks can be completed through the system, as well as the adjustment of vehicle types, the launch of the new system, BCP/DRP and so on. Generally, it is done by a third-party organization. It is pointed out that it is more important for employees of risk control department to understand the industry and the enterprise than the mathematical model. Because I am engaged in local quantitative work, it is a bit insufficient to measure the level of city commercial bank employees with FRM in the past.