Alan Alan Greenspan, chairman of the Federal Reserve, pointed out in the opening article "Risk, Regulation and Future" of The American Banker Century Edition (1published in February 1999): "Obviously, the main reason why banks can make so many contributions to modern society is that they are willing to take risks". Roger W. Ferguson Jr., Vice Chairman of the Federal Reserve, also pointed out in his speech entitled "Back to the Future of Managing Bank Risks" on March 4, 2002: "Banks survive and prosper because of taking risks. Taking risks is the most important economic function of banks and the reason for their existence."
The above conclusions show that the core competitiveness of commercial banks is risk management ability, and whether commercial banks are willing to take risks and manage risks properly will determine their profits and losses, life and death.
Traditional financial theory holds that the fundamental reason for the existence of commercial banks is to act as an intermediary between depositors and borrowers. Marx once clearly pointed out: "Banks are the concentration places of depositors and lenders." However, if it is said that in the early days of commercial banks, a large part of the value of their services was to solve the contradictions and difficulties in terms of financing term, time, amount, cash, voucher delivery, etc., then today, with very developed information technology, widely used financial instruments such as stocks and bonds, and very convenient means of payment, the value of financial institutions providing such services has already accounted for a very small proportion. Under the current conditions, the reason why "borrowers" and "lenders" need banks as intermediaries is that banks can manage risks more effectively, thus overcoming the most important or even the only obstacle in financing.
The development trend of bank supervision also shows that bank risk is the focus of supervision authorities (and then commercial banks themselves). The "three pillars" proposed by the new Basel Accord (capital adequacy ratio, government supervision and market restraint) are all risk-oriented: the amount of capital needed by banks is completely determined by their risk level; Government supervision is risk-based supervision; The key to market restraint is to make market participants pay more attention to the changes in the risk status of banks, and promote the stable operation of banks by maintaining or changing the business relationship with banks.
In the past 30 years, all the banks that closed down and were taken over by the government were due to serious problems in risk management. From the American Savings and Loan Association crisis in the 1980s to the Japanese banking crisis in the early 1990s, from the Latin American financial crisis in the 1980s and 1990s to the recent Asian financial crisis, from 1995? Allison pushed the 232-year-old Bahrain bank to death because of the huge loss of 860 million pounds caused by futures trading. In 2002, she found John? Rusnak lost $750 million due to illegal foreign exchange transactions, which caused the market value of United Irish Bank to plummet 13.7% in one day. These facts have repeatedly proved that risk management is the lifeline of commercial banks.
Particularity of commercial banks' operational risks
The concept of core competence and its corresponding theory are the famous American management scientists C.K.Prahald and Gary? Gary hamel first put forward it. They systematically expounded this point for the first time in the article "Enterprise Core Competitiveness" published in Harvard Business Review 1990. They believe that "the lasting competitive advantage of an enterprise stems from its core competence. Core competence is the fundamental factor that determines whether an enterprise can survive for a long time, and it is a kind of ability behind the tangible material resources and intangible regular resources owned by an enterprise. " In this article, they also put forward the criteria for testing the core competence of enterprises, which are summarized as "value advantage (which can create higher value for customers), incomplete imitation, incomplete substitution and incomplete tradeability".
Does the risk management ability of commercial banks meet these standards? Since the most important or even the only obstacle to financing is risk, the core value created by other financial institutions in financing should also be managing risk. What are the differences between commercial banks and non-bank financial institutions?
Let's take * * mutual funds (open-end funds) as an example to illustrate. On the surface, the role of * * * with funds and commercial banks is to realize the flow of funds from surplus units to deficit units. The difference between them seems to be only formal-when obtaining funds, banks issue certificates of deposit or passbook, while funds issue certificates of fund units or beneficiaries; When injecting funds into deficit units, banks get loan contracts and funds get securities. Therefore, the two seem to be completely replaceable. Famous American financial expert Zvi? Bodie put forward the famous conclusion that "commercial banks should be replaced by * * * mutual funds". From a deeper analysis, although the core value created by * * * and funds and commercial banks in promoting financial intermediation is to manage risks, they are qualitatively different in tools and methods for managing risks. It is these differences that enable us to say that risk management ability is the core ability of commercial banks.
(A) commercial banks risk management tools are not standardized
In a typical sense, every loan issued by a bank is designed according to the specific needs of the borrower. No matter the amount, term and interest rate of the loan, or its withdrawal arrangement and repayment arrangement, it all corresponds to the borrower's unique future cash flow. At the same time, the information basis and the process of investigation, audit, distribution and recovery are not standardized. It is this non-standardized feature that makes the loan instruments meet the differentiated special needs of customers, and are suitable for enterprises of all sizes and types, as well as ordinary consumers.
Supplementary answer: A concise definition is needed.
When enterprises are faced with market opening, deregulation and product innovation, the degree of fluctuation will increase, thus increasing business risks. Good risk management helps to reduce the probability of decision-making mistakes, avoid the possibility of losses, and relatively increase the added value of the enterprise itself.