What Are the Different Types of Back Office Jobs in Banks?

The market risk of a commercial bank refers to the risk of loss of on-balance sheet and off-balance sheet business of a bank due to adverse changes in market prices-interest rates, exchange rates, stock prices, and commodity prices. Market risk exists in banks' trading and non-trading businesses. Market risk can be divided into interest rate risk, exchange rate risk (including gold), stock price risk, and commodity price risk, which refer to the risks caused by adverse changes in interest rates, exchange rates, stock prices, and commodity prices, respectively. According to different sources, interest rate risk can be divided into repricing risk, yield curve risk, benchmark risk and option risk. The commodities mentioned in the preceding paragraph refer to certain physical products that can be traded on the secondary market, such as agricultural products, mineral products (including petroleum) and precious metals (excluding gold).

Commercial Bank Market Risk Management

Right!

Commercial bank market risk refers to the market price-interest rates,

Commercial bank market risk management is the entire process of identifying, measuring, monitoring and controlling market risks. The goal of market risk management is to

The market risk management system includes the following basic elements:

(1) Effective monitoring by the board of directors and senior management;

(2) sound market risk management policies and procedures;

(3) sound market risk identification, measurement, monitoring and control procedures;

(4) Perfect internal control and independent external audit;

(E) Appropriate

1. The board of directors and senior management of a commercial bank shall implement effective monitoring of the market risk management system.

The board of directors of a commercial bank assumes the ultimate responsibility for monitoring market risk management, ensuring that commercial banks effectively identify, measure, monitor, and control various market risks undertaken by various businesses. The board of directors is responsible for approving strategies, policies and procedures for market risk management, determining the level of market risk that banks can tolerate, and urging senior management to take necessary measures to identify, measure, monitor and control market risks, and regularly obtain information on the nature and level of market risks. Report, monitor and evaluate the comprehensiveness and effectiveness of market risk management and the performance of senior management in market risk management. The board of directors may authorize its special committees to perform some of the above functions, and the authorized committees shall submit relevant reports to the board of directors on a regular basis.

The senior management of a commercial bank is responsible for formulating, regularly reviewing and supervising the implementation of market risk management policies, procedures and specific operating procedures, timely understanding of the market risk level and its management status, and ensuring that the bank has sufficient human, material and appropriate organization Structure, management information system and technical level to effectively identify, measure, monitor and control various market risks borne by various businesses.

The board of directors and senior management of a commercial bank shall have sufficient knowledge of the Bank's business related to market risks, the various types of market risks it undertakes, and the corresponding risk identification, measurement and control methods.

The supervisory committee of a commercial bank shall supervise the performance of the board of directors and senior management in market risk management.

2. A commercial bank shall designate a special department responsible for market risk management. The department responsible for market risk management should have clear responsibilities, be relatively independent from the risk-bearing business operation department, provide independent market risk reports to the board of directors and senior management, and have the human and material resources required to perform market risk management duties. The staff responsible for the market risk management department shall possess relevant professional knowledge and skills, and fully understand the Bank's business related to market risks, the various types of market risks undertaken, and the corresponding risk identification, measurement, and control methods and technologies. Commercial banks should ensure that their remuneration system is sufficient to attract and retain qualified market risk managers.

The department responsible for market risk management of a commercial bank shall perform the following duties:

(1) to formulate market risk management policies and procedures and submit them to senior management and the board of directors for review and approval;

(2) identifying, measuring and monitoring market risks;

(3) monitoring compliance with market risk limits by relevant business operating departments and branches, and reporting over-limits;

(IV) Design and implementation

1. Commercial banks should formulate formal written market risk management policies and procedures that apply to the entire banking institution. Market risk management policies and procedures should be compatible with the bank's business nature, scale, complexity, and risk characteristics, consistent with its overall business development strategy, management capabilities, capital strength, and level of overall risk it can bear, and in line with the CBRC's market Relevant requirements for risk management. The main contents of market risk management policies and procedures include:

(1) Businesses that can be carried out, financial instruments that can be traded or invested, investments that can be taken,

1. Commercial banks shall decompose and analyze market risk factors in each business and product, and timely and accurately identify the type and nature of market risk in all trading and non-trading businesses.

2. A commercial bank shall, in accordance with the nature, scale and complexity of its business,

A commercial bank shall, in accordance with the relevant requirements of the China Banking Regulatory Commission on the internal control of commercial banks, establish a sound internal control of market risk management as an organic part of the bank's overall internal control. The internal control of market risk management should be conducive to promoting effective business operations, providing reliable financial and regulatory reports, prompting banks to strictly abide by relevant laws, administrative regulations, departmental rules and internal systems and procedures to ensure the effective operation of the market risk management system. .

1. To avoid potential conflicts of interest, commercial banks should ensure that each functional department has a clear division of responsibilities and appropriate separation of related functions. Commercial banks should ensure that market risk management functions and business operations functions remain relatively independent. The front office and the back office should be strictly separated in the trading department. The front desk transaction personnel shall not be involved in the formal confirmation, reconciliation, revaluation, transaction settlement and payment receipt and payment of the transaction. A central monitoring mechanism may be set up if necessary.

2. Commercial banks should avoid conflicts of interest between their remuneration system and incentive mechanism and market risk management objectives. Boards and senior management should avoid excessive incentives

Commercial banks shall follow the commercial banking regulations of the China Banking Regulatory Commission.

1. Commercial banks shall submit financial accounting, statistical statements and other reports related to market risks to the China Banking Regulatory Commission in accordance with the regulations of the China Banking Regulatory Commission. Where an intermediary agency is entrusted to audit the nature and level of its market risk and the market risk management system, it shall also submit an external audit report.

The market risk management policies and procedures of a commercial bank shall be reported to the China Banking Regulatory Commission for the record.

2. Commercial banks shall report the following matters to the China Banking Regulatory Commission in a timely manner:

(1) A serious loss exceeding the market risk limit set internally by the Bank;

(2) major events in domestic and international financial markets that cause large market fluctuations will affect the Bank's market risk level and its management status;

(3) Illegal acts in transaction business;

(4) Other major accidents.

A commercial bank shall formulate a reporting system for significant market risk events and report it to the China Banking Regulatory Commission for the record.

3. The China Banking Regulatory Commission shall regularly conduct on-site inspections of the market risk management status of commercial banks. The main contents of the inspections are:

(1) the performance of the board of directors and senior management in market risk management;

(2) the completeness of market risk management policies and procedures and their implementation;

(3) the effectiveness of market risk identification, measurement, monitoring and control;

(4) The rationality and stability of the assumptions and parameters used in the market risk management system;

(5) the effectiveness of the market risk management information system;

(6) the effectiveness of market risk limit management;

(7) the effectiveness of internal control of market risks;

(8) the independence, accuracy, and reliability of the bank's internal market risk report, and the truthfulness and accuracy of the market risk-related reports and reports submitted to the China Banking Regulatory Commission;

(9) the adequacy of market risk capital;

(10) the professional knowledge, skills and performance of the staff responsible for market risk management;

(11) Other circumstances of market risk management.

4. For the problems related to market risk management discovered by the China Banking Regulatory Commission in the supervision, commercial banks shall submit rectification plans and adopt rectification measures within the prescribed time limit. The China Banking Regulatory Commission may put forward suggestions for rectification of the market risk management system of commercial banks, including suggestions for adjusting market risk measurement methods, models, assumptions and parameters.

For commercial banks that fail to take effective rectification measures within a specified time limit or have serious defects in the market risk management system, the China Banking Regulatory Commission has the right to take the following measures:

(1) requiring commercial banks to increase the number of times they submit market risk reports;

(2) Require commercial banks to provide additional relevant information;

(3) Require commercial banks to appropriately reduce the level of market risk by adjusting asset portfolios and other methods;

(4) Relevant measures stipulated in the Banking Regulatory Law of the People's Republic of China and other laws, administrative regulations and departmental regulations.

5. A commercial bank shall disclose quantitative and qualitative information on its market risk status in accordance with the relevant regulations of the CBRC on information disclosure. The information disclosed shall include at least the following:

(1) the types of market risks undertaken, the overall level of market risks, and the risk positions and levels of different types of market risks;

(2) analysis of the sensitivity of market prices, such as the impact of changes in interest rates and exchange rates on banks' earnings, economic value, or financial status;

(3) Policies and procedures for market risk management, including the overall concept, policies, procedures and methods of risk management, the organizational structure of risk management, market risk measurement methods and the parameters and assumptions used, post-mortem inspection and stress testing , Market risk control methods, etc .;

(4) market risk capital status;

(5) Commercial banks adopting internal models should disclose the calculated market risk categories and their scope, the calculated overall market risk levels and the market risk levels of different categories, the highest, lowest, average, and period-end value of risks during the reporting period, and Information on model technology used, parameters and assumptions used, post-mortem testing and stress testing, and internal procedures to verify model accuracy.