商业银行操作风险管理指引英文

Guidelines on Operational Risk Management of Commercial

Banks

Chapter I General Provisions

Article 1 Pursuant to the Law of the People’s Republic of China on Banking Regulation and Supervision, the Law of the People’s Republic of China on Commercial Banks as well as other applicable laws and regulations, the Guidelines are formulated so as to enhance the operational risk management of commercial banks.

Article 2 The Guidelines apply to domestic commercial banks, wholly foreign-funded banks and Chinese-foreign joint venture banks incorporated within the territory of the People’s Republic of China.

Article 3 The operational risk in the Guidelines refers to the risk of loss resulting from inadequate or failed internal processes, people and IT system, or from external events. It includes legal risk but excludes strategic and reputational risk.

Article 4 The China Banking Regulatory Commission (hereinafter referred to as the “CBRC”) supervises and regulates the operational

risk management of commercial banks and evaluates the effectiveness thereof under its authority by law.

Chapter II Operational Risk Management

Article 5 Commercial banks should, in line with the Guidelines, set up an operational risk management system suitable to their own business nature, scale and complexity to effectively identify, assess, monitor and control/mitigate operational risk. This system can be in any form, but should comprise at least the following basic elements:

1)oversight and control by the board of directors;

2)roles and responsibilities of senior management;

3)appropriate organizational structure;

4)operational risk management policies, methods, and procedures;

and

5)requirements on making capital provisions for operational risk.

Article 6 The board of directors in a commercial bank should treat operational risk as a major risk and charge the ultimate responsibility for monitoring the effectiveness of operational risk management. The responsibilities of the board shall include:

1) developing strategies and general policies for bank-wide

operational risk management that are aligned with the bank’s

strategic goals;

2) reviewing and approving the senior management’s functions,

authorization and reporting arrangement with regard to operational risk management so as to ensure the effectiveness of the bank’s decision-making system in operational risk management and ensure that the operational risk facing the

bank’s operations is controlled within its endurance capacity; 3) reviewing regularly the operational risk reports submitted by the

senior management; fully understanding the bank’s overall operational risk management and the effectiveness of the senior management in handling material operational risk events; and monitoring and evaluating the effectiveness of daily operational

risk management;

4) ensuring that the senior management takes necessary measures

to effectively identify, assess, monitor and control/mitigate

operational risk;

5) ensuring that the bank’s operational risk m anagement system is

effectively audited and overseen by internal audit department;

and