银行风险管理分析外文翻译文献
财务风险管理外文翻译英文文献
财务风险管理中英文资料翻译Financial Risk ManagementAlthough financial risk has increased significantly in recent years,risk and risk management are not contemporary issues. The resultof increasingly global markets is that risk may originate with eventsthousands of miles away that have nothing to do with the domesticmarket。
Information is available instantaneously，which means thatchange, and subsequent market reactions, occur very quickly.The economic climate and markets can be affected very quickly bychanges in exchange rates，interest rates, and commodity prices. Counterpartiescan rapidly become problematic. As a result，it is important toensure financial risks are identified and managed appropriately。
Preparationis a key component of risk management。
What Is Risk?Risk provides the basis for opportunity. The terms risk and exposure havesubtle differences in their meaning. Risk refers to the probability of loss，while exposure is the possibility of loss, although they are often usedinterchangeably。
商业银行信贷风险管理外文文献翻译中文3000多字
商业银行信贷风险管理外文文献翻译中文3000多字Credit risk management is a XXX business。
financing ns。
payment and settlement。
and other XXX。
credit XXX risk factor for commercial banks。
XXX such as life risk and uncertainty.Effective credit risk management is essential for commercial banks to minimize the impact of credit losses。
This involves identifying and assessing potential risks。
XXX strategies。
XXX。
By doing so。
commercial banks XXX the potential for credit losses.One of the key components of credit risk management iscredit analysis。
This involves evaluating the orthiness of borrowers to determine the likelihood of default。
Credit analysis XXX's financial history。
credit score。
collateral。
XXX credit analysis。
commercial banks can make informed lending ns and minimize the risk of default.Another important aspect of credit risk management is credit XXX can also help commercial banks XXX.In n。
金融风险管理外文翻译文献
金融风险管理外文翻译文献(文档含英文原文和中文翻译)原文：Enterprise Risk Management in InsuranceEnterprise Risk Management (hereinafter referred as “ERM”) interests a wide range of professions (e.g., actuaries, corporate financial managers, underwriters, accountants,and internal auditors), however, current ERM solutions often do not cover all risks because they are motivated by the core professional ethics and principles of these professions who design and administer them. In a typical insurance company all such professions work as a group to achieve the overriding corporate objectives.Risk can be defined as factors which prevent an organization in achieving its objectives and risks affect organizations holistically. The management of risk in isolation often misses its big picture. It is argued here that a holistic management of risk is logical and is the ultimate destination of all general management activities.Moreover, risk management should not be a separate function of the business process;rather, managing downside risk and taking the opportunities from upside risk should be thekey management goals. Consequently, ERM is believed as an approach to risk management, which provides a common understanding across the multidisciplinary groups of people of the organization. ERM should be proactive and its focus should be on the organizations future. Organizations often struggle to see and understand the full risk spectrum to which they are exposed and as a result they may fail to identify the most vulnerable areas of the business. The effective management of risk is truly an interdisciplinary exercise grounded on a holistic framework.Whatever name this new type of risk management is given (the literature refers to it by diverse names, such as Enterprise Risk Management, Strategic Risk Management, and Holistic Risk Management) the ultimate focus is management of all significant risks faced by the organization. Risk is an integral part of each and every action of the organization in the sense that an organization is a basket of contracts associated with risk (in terms of losses and opportunities). The idea of ERM is simple and logical, but implementation is difficult. This is because its involvement with a wide stakeholder community, which in turn involves groups from different disciplines with different beliefs and understandings. Indeed, ERM needs theories (which are the interest of academics) but a grand theory of ERM (which invariably involves an interdisciplinary concept) is far from having been achieved.Consequently, for practical proposes, what is needed is the development of a framework(a set of competent theories) and one of the key challenges of this thesis is to establish the key features of such a framework to promote the practice of ERM. Multidisciplinary Views of RiskThe objective of the research is to study the ERM of insurance companies. In line with this it is designed to investigate what is happening practically in the insurance industry at the current time in the name of ERM. The intention is to minimize the gap between the two communities (i.e., academics and practitioners) in order to contribute to the literature of risk management.In recent years ERM has emerged as a topic for discussion in the financial community,in particular, the banks and insurance sectors. Professional organizations have published research reports on ERM. Consulting firms conducted extensive studies and surveys on the topic to support their clients. Rating agencies included theERM concept in their rating criteria. Regulators focused more on the risk management capability of the financial organizations. Academics are slowly responding on the management of risk in a holistic framework following the initiatives of practitioners.The central idea is to bring the organization close to the market economy. Nevertheless,everybody is pushing ERM within the scope of their core professional understanding.The focus of ERM is to manage all risks in a holistic framework whatever the source and nature. There remains a strong ground of knowledge in managing risk on an isolated basis in several academic disciplines (e.g., economics, finance, psychology,sociology, etc.). But little has been done to take a holistic approach of risk beyond disciplinary silos. Moreover, the theoretical understanding of the holistic (i.e., multidisciplinary)properties of risk is still unknown. Consequently, there remains a lack of understanding in terms of a common and interdisciplinary language for ERM.Risk in FinanceIn finance, risky options involve monetary outcomes with explicit probabilities and they are evaluated in terms of their expected value and their riskiness. The traditional approach to risk in finance literature is based on a mean-variance framework of portfolio theory, i.e., selection and diversification. The idea of risk in finance is understood within the scope of systematic (non-diversifiable) risk and unsystematic (diversifiable)risk. It is recognized in finance that systematic risk is positively correlated with the rate of return. In addition, systematic risk is a non-increasing function of a firm’s growth in terms of earnings. Another established concern in finance is default risk and it is argued that the performance of the firm is linked to the firm’s default risk. A large part of finance literature deals with severa l techniques of measuring risks of firms’ investment portfolios (e.g., standard deviation, beta, VaR, etc.). In addition to the portfolio theory, Capital Asset Pricing Model (CAPM) was discovered in finance to price risky assets on the perfect capital markets. Finally, derivative markets grew tremendously with the recognition of option pricing theory.Risk in EconomicsRisk in economics is understood within two separate (independent) categories,i.e.,endogenous (controllable) risk and background (uncontrollable) risk. It is recognized that economic decisions are made under uncertainty in the presence of multiple risks.Expected Utility Theory argues that peoples’ risk attitude on the size of risk (small,medium, large) is derived from the utility-of-wealth function, where the utilities of outcomes are weighted by their probabilities. Economists argue that people are risk averse (neutral) when the size of the risks is large (small).Prospect theory provides a descriptive analysis of choice under risk. In economics, the concept of risk-bearing preferences of agents for independent risks was described under the notion of “ standard risk aversion.” Most of the economic research on risk is originated on the study of decision making behavior on lotteries and other gambles. Risk in PsychologyWhile economics assumes an individual’s risk preference is a function of probabilistic beliefs, psychology explores how human judgment and behavior systematically forms such beliefs. Psychology talks about the risk taking behavior (risk preferences).It looks for the patterns of human reactions to the context, reference point,mental categories and associations that influence how people make decisions.The psychological approach to risk draws upon the notion of loss aversion that manife sts itself in the related notion of “regret.” According to Willett; “risk affects economic activity through the psychological influence of uncertainty.” Managers’ attitude of risk taking is often described from the psychological point of view in terms of feelings.Psychologists argue that risk, as a multidisciplinary concept, can not be reduced meaningfully by a single quantitative treatment. Consequently, managers tend to utilize an array of risk measurers to assist them in the decision making process under uncertainty. Risk perception plays a central role in the psychological research on risk, where the key concern is how people perceive risk and how it differs to the actual outcome. Nevertheless, the psychological research on risk provides fundamental knowledge of how emotions are linked to decision making.Risk in SociologyIn sociology risk is a socially constructed phenomenon (i.e., a social problem) and defined as a strategy referring to instrumental rationality. The sociologicalliterature on risk was originated from anthropology and psychology is dominated by two central concepts. First, risk and culture and second, risk society. The negative consequences of unwanted events (i.e., natural/chemical disasters, food safety) are the key focus of sociological researches on risk. From a sociological perspective entrepreneurs remain liable for the risk of the society and responsible to share it in proportion to their respective contributions. Practically, the responsibilities are imposed and actions are monitored by state regulators and supervisors.Nevertheless, identification of a socially acceptable threshold of risk is a key challenge of many sociological researches on risk.Convergence of Multidisciplinary Views of RiskDifferent disciplinary views of risk are obvious. Whereas, economics and finance study risk by examining the distribution of corporate returns, psychology and sociology interpret risk in terms of its behavioral components. Moreover, economists focus on the economic (i.e., commercial) value of investments in a risky situation.In contrast, sociologists argue on the moral value (i.e., sacrifice) on the risk related activities of the firm. In addition, sociologists’ criticism of economists’concern of risk is that although they rely on risk, time, and preferences while describing the issues related to risk taking, they often miss out their interrelationships(i.e., narrow perspective). Interestingly, there appears some convergence of economics and psychology in the literature of economic psychology. The intention is to include the traditional economic model of individuals’ formal rational action in the understanding of the way they actually think and behave (i.e., irrationality).In addition, behavioral finance is seen as a growing discipline with the origin of economics and psychology. In contrast to efficient market hypothesis behaviour finance provides descriptive models in making judgment under uncertainty.The origin of this convergence was due to the discovery of the prospect theory in the fulfillment of the shortcomings of von Neumann-Morgenstern’s utility theory for providing reasons of human (irrational) behavior under uncertainty (e.g., arbitrage).Although, the overriding enquiry of disciplines is the estimation of risk, they comparing and reducing into a common metric of many types of risks are there ultimate difficulty. The key conclusion of the above analysis suggests that there existoverlaps on the disciplinary views of risk and their interrelations are emerging with the progress of risk research. In particular, the central idea of ERM is to obscure the hidden dependencies of risk beyond disciplinary silos.Insurance Industry PracticeThe practice of ERM in the insurance industry has been drawn from the author’s PhD research completed in 2006. The initiatives of four major global European insurers(hereinafter referred as “CASES”) were studied for this purpose. Out of these four insurers one is a reinsurer and the remaining three are primary insurers. They were at various stages of designing and implementing ERM. A total of fifty-one face-to-face and telephone interviews were conducted with key personnel of the CASES in between the end of 2004 and the beginning of 2006. The comparative analysis (compare-and-contrast) technique was used to analyze the data and they were discussed with several industry and academic experts for the purpose of validation. Thereafter,a conceptual model of ERM was developed from the findings of the data.Findings based on the data are arranged under five dimensions. They are understanding;evaluation; structure; challenges, and performance of ERM. Understanding of ERMIt was found that the key distinction in various perceptions of ERM remains between risk measurement and risk management. Interestingly, tools and processes are found complimentary. In essence, meaning that a tool can not run without a process and vice versa. It is found that the people who work with numbers (e.g.,actuaries, finance people, etc.) are involved in the risk modeling and management(mostly concerned with the financial and core insurance risks) and tend to believe ERM is a tool. On the other hand internal auditors, company secretaries, and operational managers; whose job is related to the human, system and compliance related issues of risk are more likely to see ERM as a process.ERM: A ProcessWithin the understanding of ERM as a process, four key concepts were found. They are harmonization, standardization, integration and centralization. In fact, they are linked to the concept of top-down and bottom-up approaches of ERM.The analysis found four key concepts of ERM. They are harmonization,standardization,integration and centralization (in decreasing order of importance). It was also found that a unique understanding of ERM does not exist within the CASES, rather ERM is seen as a combination of the four concepts and they often overlap. It is revealed that an understanding of these four concepts including their linkages is essential for designing an optimal ERM system.Linkages Amongst the Four ConceptsAlthough harmonization and standardization are seen apparently similar respondents view them differently. Whereas, harmonization allows choices between alternatives,standardization provides no flexibility. Effectively, harmonization offers a range of identical alternatives, out of which one or more can be adopted depending on the given circumstances. Although standardization does not offer such flexibility,it was found as an essential technique of ERM. Whilst harmonization accepts existing divergence to bring a state of comparability, standardization does not necessarily consider existing conventions and definitions. It focuses on a common standard, (a “top-down” approach). Indeed, integration of competent policies and processes,models, and data (either for management use, compliance and reporting) are not possible for global insurers without harmonizing and standardizing them. Hence, the research establishes that a sequence (i.e., harmonization, standardization, integration,and then centralization) is to be maintained when ERM is being developed in practice (from an operational perspective). Above all, the process is found important to achieve a diversified risk culture across the organization to allocate risk management responsibilities to risk owners and risk takers.ERM: A ToolViewed as a tool, ERM encompasses procedures and techniques to model and measure the portfolio of (quantifiable) enterprise risk from insurers’ core disciplinary perspective. The objective is to measure a level of (risk adjusted) capital(i.e., economic capital) and thereafter allocation of capital. In this perspective ERM is thought as a sophisticated version of insurers’ asset-liability management.Most often, extreme and emerging risks, which may bring the organization down,are taken into consideration. Ideally, the procedure of calculating economic capital is closely linked to the market volatility. Moreover, the objective is clear, i.e., meetingthe expectation of shareholders. Consequently, there remains less scope to capture the subjectivity associated with enterprise risks.ERM: An ApproachIn contrast to process and tool, ERM is also found as an approach of managing the entire business from a strategic point of view. Since, risk is so deeply rooted in the insurance business, it is difficult to separate risk from the functions of insurance companies. It is argued that a properly designed ERM infrastructure should align risk to achieve strategic goals. Alternatively, application of an ERM approach of managing business is found central to the value creation of insurance companies.In the study, ERM is believed as an approach of changing the culture of the organization in both marketing and strategic management issues in terms of innovating and pricing products, selecting profitable markets, distributing products, targeting customers and ratings, and thus formulating appropriate corporate strategies. In this holistic approach various strategic, financial and operational concerns are seen integrated to consider all risks across the organization.It is seen that as a process, ERM takes an inductive approach to explore the pitfalls (challenges) of achieving corporate objectives for broader audience (i.e.,stakeholders) emphasizing more on moral and ethical issues. In contrast, as a tool,it takes a deductive approach to meet specific corporate objectives for selected audience(i.e., shareholders) by concentrating more on monitory (financial) outcomes.Clearly, the approaches are complimentary and have overlapping elements. 作者：M Acharyya译文：保险业对企业风险管理的实证研究企业风险管理涉及各种行业(如保险精算师、公司财政经理、保险商、会计和内部审计员)，当前企业风险管理解决方案往往不能涵盖所有的风险，因为这些方案取决于决策者和执行则的专业道德和原则。
银行财务风险的外文文献
银行财务风险的外文文献银行财务风险的外文文献：1. Bank Financial Risk Management: A Practical Guide to Managing and Mitigating Financial Risks本书是由银行财务风险管理专家写的一本实践指南，介绍了银行在管理和缓解金融风险方面的具体策略和方法。
包括了市场风险、信用风险、利率风险、流动性风险等方面的内容。
2. Managing Financial Risks: From Global to Local该书是一本汇集了全球各地知名专家的讲座，内容涵盖了银行金融风险的最新研究成果。
从宏观经济风险到信用风险等方面，对银行金融风险管理提供了全面的视角和思路。
3. Financial Risk Manager Handbook该书是由全球金融风险管理协会GARP撰写的指南手册，涵盖了金融风险管理的理论、实践和案例研究。
介绍了金融风险的识别、量化、监控和管理等重要方面。
4. Risk Management and Financial Institutions该书是一本行业标准教材，由两位金融风险管理领域的权威合著，涉及了金融风险定义、评估和管理的关键内容。
书中还包括了现代金融和银行业的最新发展和趋势等方面的内容。
5. Financial Risk: Theory, Evidence and Implications该书是一本由多位学者合著的金融风险研究专著，旨在为银行业和投资机构等金融市场从业者提供有关金融风险识别和管理的理论和实践指南。
通俗易懂的语言介绍了金融市场的基本原则，包括风险、收益、投资组合构建和风险管理等重要方面。
银行信用风险中英文对照外文翻译文献
中英文对照外文翻译文献(文档含英文原文和中文翻译)估计技术和规模的希腊商业银行效率：信用风险、资产负债表的活动和国际业务的影响11.介绍希腊银行业经历了近几年重大的结构调整。
重要的结构性、政策和环境的变化经常强调的学者和从业人员有欧盟单一市场的建立，欧元的介绍，国际化的竞争、利率自由化、放松管制和最近的兼并和收购浪潮。
希腊的银行业也经历了相当大的改善，通信和计算技术，因为银行有扩张和现代化其分销网络，其中除了传统的分支机构和自动取款机，现在包括网上银行等替代分销渠道。
作为希腊银行（2004 年）的年度报告的重点，希腊银行亦在升级其信用风险测量与管理系统，通过引入信用评分和概率默认模型近年来采取的主要步骤。
此外，他们扩展他们的产品/服务组合，包括保险、经纪业务和资产管理等活动，同时也增加了他们的资产负债表操作和非利息收入。
最后，专注于巴尔干地区（如阿尔巴尼亚、保加利亚、前南斯拉夫马其顿共和国、罗马尼亚、塞尔维亚）的更广泛市场的全球化增加的趋势已添加到希腊银行在塞浦路斯和美国以前有限的国际活动。
在国外经营的子公司的业绩预计将有父的银行，从而对未来的决定为进一步国际化的尝试对性能的影响。
本研究的目的是要运用数据包络分析（DEA）和重新效率的希腊银行部门，同时考虑到几个以上讨论的问题进行调查。
我们因此区分我们的论文从以前的希腊银行产业重点并在几个方面，下面讨论添加的见解。
首先，我们第一次对效率的希腊银行的信用风险的影响通过检查其中包括贷款损失准备金作为附加输入Charnes et al.(1990 年)、德雷克（2001 年）、德雷克和大厅(2003 年)，和德雷克等人（2006 年）。
作为美斯特(1996) 点出"除非质量和风险控制的一个人也许会很容易误判一家银行的水平的低效；例如精打细算的银行信用评价或生产过高风险的贷款可能会被贴上标签一样高效，当相比银行花资源，以确保它们的贷款有较高的质量"(p.1026)。
金融银行信用风险论文中英文资料外文翻译文献
中英文资料外文翻译文献Managing Credit Risks with Knowledge Management forFinancial BanksAbstract-Nowadays,financial banks are operating in a knowledge society and there are more and more credit risks breaking out in banks.So,this paper first discusses the implications of knowledge and knowledge management, and then analyzes credit risks of financial banks with knowledge management. Finally, the paper studies ways for banks to manage credit risks with knowledge management. With the application of knowledge management in financial banks, customers will acquire better service and banks will acquire more rewards.Index Terms–knowledge management; credit risk; risk management; incentive mechanism; financial banksI.INTRODUCTIONNowadays,banks are operating i n a“knowledge society”.So, what is knowledge? Davenport(1996)[1]thinks knowledge is professional intellect, such as know-what, know-how, know-why, and self-motivated creativity, or experience, concepts, values, beliefs and ways of working that can be shared and communicated. The awareness of the importance of knowledge results in the critical issue of “knowledge management”. So, what is knowledge management? According to Malhothra(2001)[2], knowledge management(KM)caters to the critical issues of organizational adaptation, survival and competence in face of increasingly discontinuous environmental change. Essentially it embodies organizational processes that seek synergistic combination of data and information processing capacity of information technologies and the creative and innovative capacity of human beings. Through the processes of creating,sustaining, applying, sharing and renewing knowledge, we can enhance organizational performance and create value.Many dissertations have studied knowledge managementapplications in some special fields. Aybübe Aurum(2004)[3] analyzes knowledge management in software engineering and D.J.Harvey＆R.Holdsworth(2005)[4]study knowledge management in the aerospace industry. Li Yang(2007)[5] studies knowledge management in information-based education and Jayasundara＆Chaminda Chiran(2008)[6] review the prevailing literature on knowledge management in banking industries. Liang ping and Wu Kebao(2010)[7]study the incentive mechanism of knowledge management inBanking.There are also many papers about risks analysis and risks management. Before the 1980s, the dominant mathematical theory of risks analysis was to describe a pair of random vectors.But,the simplification assumptions and methods used by classical competing risks analysis caused controversy and criticism.Starting around the 1980s, an alternative formulation of risk analysis was developed,with the hope to better resolve the issues of failure dependency and distribution identifiability. The new formulation is univariate risk analysis.According to Crowder(2001)[8], David＆Moeschberger(1978)[9]and Hougaard(2000)[10],univariate survival risk analysis has been dominantly, which is based on the i.i.d assumptions(independent and identically distributed) or, at least, based on the independent failure assumption.Distribution-free regression modeling allows one to investigate the influences of multiple covariates on the failure, and it relaxes the assumption of identical failure distribution and to some extent, it also relaxes the single failure risk restriction. However, the independent failures as well as single failure events are still assumed in the univariate survival analysis. Of course,these deficiencies do not invalidate univariate analysis, and indeed, in many applications, those assumptions are realistically valid.Based on the above mentioned studies, Ma and Krings(2008a, 2008b)[11]discuss the relationship and difference of univariate and multivariate analysis in calculating risks.As for the papers on managing the risks in banks, Lawrence J.White(2008)[12]studies the risks of financial innovations and takes out some countermeasures to regulate financial innovations. Shao Baiquan(2010)[13]studies the ways to manage the risks in banks.From the above papers, we can see that few scholars have studied the way to manage credit risks with knowledge management. So this paper will discuss using knowledgemanagement to manage credit risks for financial banks.This paper is organized as follows: SectionⅠis introduction. SectionⅡanalyzes credit risks in banks with knowledge management. SectionⅢstudies ways for banks to manage credit risks with knowledge management. SectionⅣconcludes.II.ANALYZING CREDIT RISKS IN BANKS WITHKNOWLEDGE MANAGEMENTA.Implication of Credit RiskCredit ris k is the risk of loss due to a debtor’s non-payment of a loan or other line of credit, which may be the principal or interest or both.Because there are many types of loans and counterparties-from individuals to sovereign governments-and many different types of obligations-from auto loans to derivatives transactions-credit risk may take many forms.Credit risk is common in our daily life and we can not cover it completely,for example,the American subprime lending crisis is caused by credit risk,which is that the poor lenders do not pay principal and interest back to the banks and the banks do not pay the investors who buy the securities based on the loans.From the example,we can find that there are still credit risks,though banks have developed many financial innovations to manage risks.B.Sharing KnowledgeKnowledge in banks includes tacit knowledge and explicit knowledge,which is scattered in different fields.For example, the information about the customers’income, asset and credit is controlled by different departments and different staffs and the information can’t be communicated with others. So it is necessary for banks to set up a whole system to communicate and share the information and knowledge to manage the risks.C.Setting up Incentive Mechanism and Encouraging Knowledge InnovationThe warning mechanism of credit risks depends on how bank’s staffs use the knowledge of customers and how the staffs use the knowledge creatively.The abilities of staffs to innovate depend on the incentive mechanism in banks,so, banks should take out incentive mechanism to urge staffs to learn more knowledge and work creatively to manage credit risks.We can show the incentive mechanism as Fig.1:Fig.1 The model of incentive mechanism with knowledge management From Fig.1,we can see there are both stimulative and punitive measures in the incentive model of knowledge management for financial banks.With the incentive mechanism of knowledge management in financial banks,the staffs will work harder to manage risks and to acquire both material returns and spiritual encouragement.III.MANAGING CREDIT RISKS IN BANKS WITH KNOWLEDGEMANAGEMENTThere are four blocks in managing credit risks with knowledge management.We can show them in Fig.2:Fig.2 The blocks of managing credit risksA.Distinguishing Credit RiskDistinguishing credit risks is the basis of risk management.If we can’t recognize the risks,we are unable to find appropriate solutions to manage risks.For example,the United States subprime crisis in 2007 was partly caused by that the financial institutions and regulators didn’t recognize the mortgage securitization risks timely.With knowledge management,we can make out some rules to distinguish credit risks,which are establishing one personal credit rating system for customers and setting up the data warehouse.We can use the system to analyze customers’credit index, customers’credit history and the possible changes which may incur risks.At the same time,we should also watch on the changes of customers’property and income to recognize potential risks.B.Assessing and Calculating Credit RiskAfter distinguishing the credit risks,we should assess the risk exposure,risk factors and potential losses and risks, and we should make out the clear links.The knowledgeable staffs in banking should use statistical methods and historical data to develop specific credit risks evaluation model and the regulators should establish credit assessment system and then set up one national credit assessment system.With the system and the model of risk assessment,the managers can evaluate the existing and emerging risk factors,such as they prepare credit ratings for internal use.Other firms,including Standard ＆Poor’s,Moody’s and Fitch,are in the business of developing credit rating for use by investors or other third parties.Table Ⅰshows the credit ratings of Standard ＆Poor’s.TABLE ISTANDARD ＆POOR’S CREDITT RATINGSAfter assessing credit risks,we can use Standardized Approach and Internal Rating-Based Approach to calculate the risks.And in this article,we will analyze how Internal Rating-Based Approach calculates credit risk of an uncovered loan.To calculate credit risk of an uncovered loan,firstly,we will acquire the borrower’s Probability of Default(PD),Loss Given Default(LGD),Exposure at Default(EAD)and Remaining Maturity(M).Secondly,we calculate the simple risk(SR)of the uncovered loan,using the formula as following:SR=Min{BSR(PD)*[1+b(PD)*(M-3)]*LGD／50,LGD*12.5} (1)Where BSR is the basic risk weight and b(PD)is the adjusting factor for remaining maturity(M).Finally,we can calculate the weighted risk(WR)of the uncovered loan,using the following formula:WR=SR*EAD (2)From(1)and(2),we can acquire the simple and weighted credit risk of an uncovered loan,and then we can take some measures to hedge the credit risk.C.Reducing Credit RiskAfter assessing and calculating credit risks,banks should make out countermeasures to reduce the risks.These measures include：(1)Completing security system of loans. The banks should require customers to use the collateral and guarantees as the security for the repayment,and at the same time,banks should foster collateral market.(2)Combining loanswith insurance.Banks may require customers to buy a specific insurance or insurance portfolio.If the borrower doesn’t repay the loans,banks can get the compensation from the insurance company.(3)Loans Securitization. Banks can change the loans into security portfolio,according to the different interest rate and term of the loans,and then banks can sell the security portfolio to the special organizations or trust companies.D.Managing Credit Risk and Feeding backA customer may have housing loans,car loans and other loans,so the banks can acquire the customer’s credit information,credit history,credit status and economic background from assessing the risks of the customer based on the data the banks get.By assessing and calculating the risks of the customer,banks can expect the future behavior of the customers and provides different service for different customers. Banks can provide more value-added service to the customers who have high credit rates and restrict some business to the customers who have low credit rates.At the same time, banks should refuse to provide service to the customers who are blacklisted. Banks should set up the pre-warning and management mechanism and change the traditional ways,which just rely on remedial after the risks broke out.In order to set up the warning and feeding back mechanism,banks should score credit of the customers comprehensively and then test the effectiveness and suitability of the measures,which banks use to mitigate risks.Finally, banks should update the data of the customers timely and keep the credit risk management system operating smoothly.IV.CONCLUSIONIn this paper,we first discuss the implications of knowledge and knowledge management.Then we analyze the credit risks of financial banks with knowledge management. Finally,we put forward ways for banks to manage credit risks with knowledge management.We think banks should set up data warehouse o f customers’credit to assess and calculate the credit risks,and at the same time,banks should train knowledgeable staffs to construct a whole system to reduce risks and feed back.With knowledge management,banks can take out systemic measures to manage cust omers’credit risks and gain sustainable profits.ACKNOWLEDGMENTIt is financed by the humanities and social sciences project of the Ministry of Educationof China(NO.06JC790032).REFERENCES[1]Davenport,T.H.et al,“Improving knowledge work processes,”Sl oan Management Review,MIT,USA,1996,V ol.38,pp.53-65.[2]Malhothra,“Knowledge management for the new world of business,”New York BRINT Institute,2001,lkm/whatis.htm.[3]Aybübe Aurum,“Knowledge management in software engineering education,”Proceedings of the IEEE International Conference on Advanced Learning Technologies,2004,pp.370-374.[4]D.J.Harvey＆R.Holdsworth,“Knowledge management in the aerospace industry,”Proceedings of the IEEE International Professional Communication Conference,2005,pp.237-243.[5]Li Yang,“Thinking about knowledge management applications in information-based education,”IEEE International Conference on Advanced Learning Technologies,2007,pp.27-33.[6]Jayasundara＆Chaminda Chiran,“Knowledge management in banking industries:uses and opportunities,”Journal of the University Librarians Association of Sri Lanka,2008,V ol.12,pp.68-84.[7]Liang Ping,Wu Kebao,“Knowledge management in banking,”The Conference on Engineering and Business Management,2010, pp.4719-4722.[8]Crowder,M.J.Classical Competing Risks,British:Chapman&Hall, 2001,pp.200.[9]David,H.A.&M.L.Moeschberger,The Theory of Competing Risks, Scotland,Macmillan Publishing,1978,pp.103.金融银行信用风险管理与知识管理摘要：目前，金融银行经营在一个知识型社会中，而且越来越多的信用风险在在银行中爆发。
互联网银行风险管理外文及翻译
互联网银行风险管理外文及翻译1. Introduction本文目的是探讨互联网银行风险管理的外文资料，并提供翻译。
以下是一些与互联网银行风险管理相关的文献，供参考。
2. 外文文献1Author: John SmithYear: 20152.1 翻译：标题：互联网银行风险管理：综述作者：约翰·史密斯年份：2015年摘要：本文全面回顾了互联网银行风险管理的实践。
涉及的风险类型包括网络安全风险、欺诈风险和运营风险。
文章讨论了在互联网银行环境中管理这些风险的不同策略和最佳实践。
3. 外文文献2Title: Risk Assessment and Mitigation Techniques for Internet Banking SystemsAuthor: Jane DoeYear: 2018Summary: This paper focuses on the assessment and mitigation of risks in internet banking systems. It presents a framework for identifying and evaluating risks specific to internet banking and suggests various techniques for mitigating these risks. The paper also discusses the importance of continuous monitoring and updating of risk management strategies.3.1 翻译：标题：互联网银行系统的风险评估与缓解技术作者：简·多伊年份：2018年摘要：本文侧重于互联网银行系统中风险的评估和缓解。
它提出了一个针对互联网银行特定风险的识别和评估框架，并提出了各种缓解这些风险的技术。
商业银行信用卡风险管理外文文献翻译最新译文
文献出处：Nicely E. The research of commercial bank credit risk management [J]. Research in International Business and Finance, 2015, 8(2): 17-26.原文The research of commercial bank credit risk managementNicely EAbstractCommercial bank credit card business risk management broad sense refers to the commercial bank credit card business, because of various unfavorable factors caused by the issuers, cardholders, specially engaged the possibility of loss. Credit risk refers to the pure credit for credit CARDS are unsecured loans, and credit is not high, the customer more than individual, as well as small amount of single feature, lead to the possibility of loss of card issuers. Through to the commercial Banks to do a good job of credit card risk management put forward the Suggestions and comments, and pay attention to the risks of commercial Banks to establish perfect management system, system, business process research, and put forward the commercial Banks in establishing a system of credit card business management structure, regulations, at the same time, want to notice to each kind of risk identification, measurement, assessment and do a good job in risk loss provisions in personnel management, should pay attention to establish risk rewards and punishment mechanism, pay attention to the positive incentives to the employees.Keywords: Credit CARDS; Risk management; Incentive mechanism1 IntroductionCredit card refers to the bank issued to individuals and units, with the function such as shopping, consumption and access cash bank card. Its striking feature is that the Banks granted to customer a certain line of credit, customers can enjoy the privilege of the reimbursement after be being card first, its form is a positive with the issuing bank name, the period of validity, card number, card, the cardholder's name, article with a magnetic stripe, signature on the back of the information such as bank CARDS. We now call the credit card, generally refers to borrow write down card. Credit risk refers to the bank credit card holders for various reasons failed to fullyrepay bank debt and cause the possibility of default, defaults, bank will because the cardholder does not thereby causing loss to the bank funds paid promptly. Credit card main risk including fraud risk, credit risk, operational risk, accredit card risk management refers to in the process of credit card business, the possible including fraud risk, credit risk, operational risk, etc, all kinds of risk management and control is to reduce the possibility of loss The loss rate of operation and management activities.2 Literature reviewThe concept of risk management since the 30 s of 20th century, after nearly 40 years of development to form a system, gradually by people began to attach importance to and cognition, form a new management discipline. The concept of risk mainly comes from the insurance industry, insurance for risk defined as the uncertainty of loss. In 1964, the United States of the risk management and insurance, it has made the definition: risk book points out that through the risk identification, assessment, and control to achieve with minimum cost to make a management method of minimizing the risk loss. In 1976, eight Gerry, in his book, the risk management of international enterprise, points out that protection of enterprise's financial stability, reduce the loss caused by risk events is the main goal of the enterprise risk management. In 1975, risk management and insurance management society, scholars from all over the world including general principles, risk management was determined by the talk of risk identification and measurement, risk control and other criteria. The establishment of these guidelines, marks all over the world, risk management theory with the preliminary development, management framework has been set up. Also marks the risk management has entered a new stage. In July 2004, Basel 2 rules on commercial Banks, puts forward a new risk management requirements, he fully considered for the bank including market risk, liquidity risk, credit risk and operational risk, a variety of provide for risk identification, risk measurement standard, make risk management work more accurate quantitative measurement. In 2004, the COSO committee issued "enterprise risk management integrated framework", put forward by the enterprise internal control into risk control as the main direction of management thinking. Puts forward the concept of comprehensive risk management,including internal environment, goal setting, time identification, risk evaluation, risk countermeasure, control activities, information and communication and so on eight aspects. American engineer bill fair and Earl joint research and development of the FICO credit score model, since the most card issuers have also been used this model. This model gives the credit scoring system out of a possible 900 points, according to the situation of the borrower's credit history and compare the data with other borrowers, given the borrower credit situation trend in the future.3 Credit card risk3.1 Credit card cash outCredit card cash out to merchants with the bad cardholders or other third party in collusion, or merchants themselves by credit card as the carrier, through the fictitious transactions, asking price, cash return, show the credit card credit behavior, including but not limited to: merchants and cardholders conspired to use point-of-sale terminals (POS), with fictitious transactions, falsely making out the price, cash returns to the behavior of the cardholders to pay cash directly; Or merchants to help paid the cardholder account overdraft, after using the POS machine will advances in fictitious trading way back to their accounts, and collect fees to the cardholder a card such as behavior; Or online merchants cardholders conspired to fictional price, false transactions, such as buying from selling the way, show the credit card for trafficking in fraudulent credit card Internet consumption credit, etc.3.2 False card stolen brushFalse card stolen brush refers to criminals use false card on the POS terminal for credit card transactions to steal bank funds, belong to the important type of fraud. Criminals often by merchants, independent bank terminals, as well as a variety of convenient payment terminal channels, using dedicated track record the equipment needed for the bank card information side track information through various channels, such as the Internet or buy others have steal bank card track information, password access usually by peeping in the cardholder spending places the cardholder password or independent in ATM equipment installed video cameras record customer password, even through ATM keyboard paste, such as false record customer password keyboard,or using client code, easy to guess the cardholder password and other means to obtain the cardholder password.3.3 Online payment fraudOnline payment fraud refers to the fraud part swindled through Internet channels and the cardholder's bank. On-line payment fraud mainly by non-financial institutions or commercial Banks provide online payment channel for fraud. Current fraud activists by phishing site, bank card fraud or Trojan virus, characterized by use of phishing site or Trojan virus to steal the cardholder's bank card number, password and verification code information, phishing cardholders to online trading, to defraud money. Or commercial bank online banking channel for bank card fraud, fraud part using bank online banking vulnerabilities, and the weak link in the online banking fraud.3.4 Operating riskPrevention and control of credit card operation risk, first, to find a good risk points, find out in the hairpin and post-loan risk prone link in the entire process, find out the risk points, and then control the risk. Credit card's life cycle is divided into application stage, audit stage, hairpin used to send phase, activation and post-loan management, such as card renewal phase. First by the applicant voluntarily to the commercial bank to apply for or commercial bank marketing personnel to promote credit card products to the applicant, the applicant according to the guidance of sales people to fill out credit card application form after the above requirements to fill out information, to submit proof of identity is required by the application, work proves that the domicile certificate materials, such as bank marketing personnel will be the applicant's application form submitted to the bank's examination and approval department, by a bank according to the customer qualification examination and approval department for credit card mail after examination and approval to the customer. Customers call the bank customer service special line opened activate the card, the card can normal use, generally the validity of the credit card for 3 ~ 5 years according to the process of the life cycle of credit card sorting operation risk points exist in the whole cycle.4 Conclusions and recommendationsFalse card stolen brush loss brings to the commercial Banks, cardholders Carrie's money is missing, tend to give the feeling of cardholders' money in the bank is not safe, affect the reputation of the bank, bring bank reputation risk. In the process of pursuing for unauthorized, if not solve in time, often commercial Banks must bear a lot of damage. Due to false card stolen brush is not tight to bank losses, and seriously affected the reputation of the bank. So focus on guard against the risk of false card stolen brush is the key of the bank fraud risk control. Commercial bank credit card business is strengthening risk prevention. To do the following: to strengthen the education of the cardholder and prevent unauthorized knowledge propaganda, tip card holders do not use the card to the others, pay attention to protect the password in the daily charge without being stolen. Strengthen the bank back transaction monitoring, summarizes the characteristics of the pseudo card stolen brush, such as the combination of false card stolen brush is easy to occur before time, business category, unauthorized ongoing balance inquiry, around zero, fraud part of bank daily trading limit restrictions for unauthorized transaction monitoring rules set by the characteristics. When the transaction behavior, identity card and cardholders are found not to conform or high transaction should contact the cardholder to confirm authenticity, to confirm that the cardholder to authorize the transaction after I deal correct. Effectively raise Banks to prevent false card stolen brush ability of risk prevention and control. Magnetic stripe card renewal work done as soon as possible because the bank magnetic stripe card refers to magnetic materials for storage medium, such as bank account information recorded in the magnetic stripe CARDS, magnetic stripe card is easy to be copied to the bank money loss, therefore at present a lot of Banks have begun to bank card renewal work, with good safety performance of financial IC card instead of bank magnetic stripe card. In addition, improve the incentive mechanism construction of risk management, on the basis of regular and irregular in the risk assessment results, good for the risk assessment results, comprehensive risk management framework construction perfect mechanism, through the authorization for adjustment, performance ratings, priority support to start newbusiness delegation, adjustment factors of business innovation, management, can be appropriately in the human resources and cost allocation give policy tilt, can give points in performance appraisal review. For risk management body have made outstanding contributions or reduce loss of major risk events offer certain material and spiritual reward employees, and on the personal career advancement channels give sufficient consideration; For all kinds of risk management talents, external training, qualification certification, access to exchange offer certain aspects such as policy tilt, and on the personal career advancement channels will be given full consideration. For all kinds of risk management talents, external training, qualification certification, access to exchange offer certain aspects such as policy tilt, and on the personal career advancement channels will be given full consideration.译文商业银行信用卡风险管理研究Nicely E摘要商业银行信用卡业务风险管理广义上讲是指在商业银行信用卡业务经营中，因各种不利因素而导致的发卡机构、持卡人、特约商户等损失的可能性。
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银行风险管理分析外文翻译文献(文档含英文原文和中文翻译)译文：商业银行风险管理:过程分析摘要在过去一年里，我们通过现场参观金融服务公司来进行审查和评估其金融风险管理系统。
商业银行的分析涵盖了大量的北美超地区性和准货币中心机构，以及一些美国以外的公司，获得的信息包括了一些理念和财务风险管理的做法。
本文概述了本次调查的结果，并报告了该行业风险管理技术的状况。
它报告了行业的执业标准和评价方式，以及为什么特定选择的方式进行。
此外，本文提出了一些适当的批评。
我们讨论这些问题，包括业界认为最难处理的、现行风险分析方法中的缺点以及现行风险管理程序中一些缺失的元素。
一、引言在过去十年中，银行业经历了一场惨痛的损失。
由于信贷风险承担情况变差、利率变动和一些金融衍生工具理论上可能发生的对冲资产负债表风险，一些表现良好的公司突然宣布了自己的巨额亏损。
在针对这种情况，商业银行已开始了一项对风险管理和控制系统的升级。
在某种程度上来说，这次活动是出于我们对行业财务风险弱点的认识。
在斯隆基金会的支持下，沃顿商学院金融机构中心，一直在金融部门中参与对金融风险管理的分析。
通过过去的一学年时间，实地考察的审查方法贯穿于评估风险管理制度和风险评估所订定的过程中。
在银行部门，系统进行了评估，包括很多北美超地区性和准±货币中心的商业银行，以及大量的大型投资银行公司。
这些结果被提交给银行公司，继续参与更广泛的反应和验证。
本文的目的是概述本次调查的结果。
它报告了行业风险管理技术情况，包括问题的提出，问题的回答，以及受访者遗留问题的解决。
此报告没有列举行业内普遍采用的方法，也没有提供对这些方法的评价。
相反，它报告的是执业标准和评价方法，以及它为什么选择特定的方式进行。
但是，在某些领域，甚至连一些最佳方法也并不适用。
因此，批评也将在适当情况下给出。
文章最后提出了当前未答复的，或回答比较复杂、银行采用的现行做法尚不严密的问题清单。
在这里，我们讨论的，包括业界认为最难处理的、现行风险分析方法中的缺点以及现行风险管理程序中一些缺失的元素。
二、风险行业的特许经营的中心要素1．我们应该考虑什么类型的风险？商业银行正承担着业务风险。
在提供金融服务的过程中，他们承担各种金融风险。
在过去十年中，我们对商业银行在金融部门的地位的认识已大大提高。
在这段时间，商业银行在金融部门扮演的什么样的角色已经众所周知，无论是在学术文献或者金融新闻上都有体现。
在本文中，这些参数这里既不会审查，也不会列举。
我只想说，市场参与者寻求这些金融机构的服务，因为这些机构有能力为客户提供市场知识，交易效率和资金的能力。
在履行这些职责时，他们一般充当交易的主体。
因此，他们用自己的资产负债表，以方便交易和承受与它相关的风险。
可以肯定的是，这些银行业金融机构进行的活动不会直接受资产负债表的影响。
这些服务包括代理和咨询活动，如：（1）信托及投资管理；（2）通过`“最大努力”促进私人和公共存款合同；（3）通过第20条标准承保该控股公司的附属公司；（4）包装、证券化、分发以及为消费和房地产领域的贷款债务提供服务。
这些项目是在传统的财务报表之外的，因为后者依赖于普遍接受的会计程序，而不是一个真正的经济资产负债表。
然而，银行业所面临的风险，绝大多数是来自于企业的资产负债表。
在这里，我们对风险管理以及风险管理与控制的必要程序需要集中探讨。
因此，在这里，我们必须把风险的管理程序的审查集中起来。
2．何种风险将被吸收？在银行的主要业务，即那些涉及其自身的资产负债表和其基本的商业贷款和借款中的风险，并不完全由银行自身所承担.在许多情况下，机构将通过适当的商业行为的交易来消除或减轻金融风险与关联，在其他情况下，将通过定价和产品设计的结合把风险转移给其他缔约方。
银行业认识到，一个机构并不需要以从事经营的方式，对自己施加不必要的风险。
同时，银行也无需承担风险，它只需要把风险有效地转移给其他参与者。
相反，对于企业来说，仅在原有的水平上管理风险要比管理市场本身或由业主自己的投资组合产生的风险来的有效的多。
总之，它只应该接受一部分唯一来自于银行服务阵列的风险。
在其他地方（奥德菲尔德和圣多马罗，1997）有人认为，从管理角度来看，所有金融机构面临的风险可细分为三个类型。
它们是：（1）通过简单的商业惯例可消除或避免的风险；（2）可转移给其他参与者的风险；（3）在公司可控水平上积极管理的风险。
规避这些风险的第一种做法是，从标准银行活动特有的宗旨出发（尤其是该机构的经营宗旨），采取行动，减少和消除风险。
共同的风险规避行为在这里至少包括三种类型。
第一步，通过合同和程序的标准化来防止低下的效率和不正确的财务决策。
第二步，通过多元化的投资组合分散借款人的利益，从而减少投资损失带来的影响。
第三步，通过执行机构管理层激励兼容合同，要求员工承担责任。
在每一种情况下，我们的目标都是摆脱风险，特别是金融服务公司没有必要承担的，或者只吸收了最佳数量的特定类型的风险。
当然也存在通过风险转移技术就可以大大消除或降低的风险。
虽然银行承担了市场上所存在公司的大部分风险，不过利率风险是可以转让的，如掉期或其他衍生工具利率产品；借款条件也可以针对影响持续时间的变化而进行修改。
最后，银行可以从服务客户群的过程中，购买或出售金融债权分散或集中的风险。
从某种程度上来说，这些资产的财务风险都是公司在市场理解的基础上产生的。
这些资产能以公允价值出售。
除非该机构已在管理风险上有比较优势或者愿意接受嵌入式风险，我们没有理由为银行吸收这些风险，而不是转化这些风险。
然而，有两类固有的风险资产或活动应被银行吸收。
在这种情况下，使用企业资源来管理银行风险的水平是一种良好的方式。
其中，第一个内容，包括金融资产和金融活动。
这种嵌入性质的风险传达给第三方比较复杂和困难。
这里的意思就是，是当银行持有的复杂和专有资产数量下降时，这种风险转移起来比较困难。
当然通过二级市场，我们还是可以转移风险。
但是在这种情况下，传递风险可能会比对冲这种潜在风险更加困难和昂贵。
此外，泄露客户信息这种不正当的竞争手段能给自己带来好处。
第二个内容包括自营他们接受的头寸风险和预期回报。
在这里，吸收风险头寸是银行极为重要的经营宗旨。
贷款活动所固有的信贷风险就是一个明显的例子，它是银行在市场交易时必然活跃的风险。
在所有这些情况下，风险的吸收需要进行监测，并应当建立有效的管理机制。
只有到那时，公司系统才实现其财务业绩的目标。
3.这些风险是如何管理的？鉴于上述情况，那么那些必要的程序必须履行，以便进行适当的风险管理呢？从本质上讲，是采用什么技术既限制和管理风险的不同类型，以及它们是如何在各种风险控制区实施？这是对这些问题，我们现在转向。
公司领导在审查采用的程序，这种方法从一出现大规模的风险管理系统的检查。
该公司的管理依赖于银行的步骤，以落实风险管理体系的序列。
这些可以被看作是包含以下四个部分：（1）标准和报告；（2）持仓限额或规则；（3）投资指南和策略；（4）激励合同和赔偿。
一般来说，这些工具建立了权衡揭示、定义程序来管理这些风险，限制个别职位到可接受的水平，并鼓励决策者管理采取与该公司的目标相一致的目标和风险的方式。
为了解这四个部分基本的风险管理技术如何分别实现这些目标，我们将对下面过程的每一个部分详细作说明。
在第4节我们将说明这些技术是如何应用到银行界所面临的具体风险。
（1）标准和报告这些风险管理技术，涉及到两个不同的概念第一次活动，即制定标准和财务报告。
将它们列在一起，因为它们是整个风险系统必不可少的条件。
承销标准，风险分类，审查标准和风险都是传统的管理和控制工具。
一致的评估标准和各类风险等级是投资组合中必不可少的风险协议内容，并且这些风险的程度必须减轻或吸收。
标准化的财务报告是下一个组成部分。
显然，外部审计，监管报告，评级机构的评价是投资者衡量资产质量和企业层面风险必不可少的内容。
不管怎样，这些报告一直是标准化的。
不过，我们对资产质量和风险状况信息的需求超越了我们对公共报告和审计报告的需求。
类似这样的内部报告需要更加规范化、频繁化和定期化。
我们需要用日报或周报来取代国际会计准则认可的季度报告。
（2）持仓限额或规则第二个内部控制技术是利用持仓限额和使用最低参与标准。
就后者而言，风险采取域限制，只是对那些通过预先确定的质量标准的资产或证券。
然后，即使对那些符合条件的投资，也会有一些限制性的规定。
用这些规定来覆盖证券和信贷的风险，和其他相对集中的各类风险。
虽然这种限制在设立和管理起来比较昂贵，他们所实行的限制风险，可以由任何人单独承担。
这样就可以将风险统筹起来。
一般来说，每个人承担的资金将得到一个明确的限制。
这种做法适用于商人，放贷人和投资组合经理。
汇总报表通过业务单位指出限制条件和当前漏洞。
在一个拥有数千名员工的大型公司，及时的提供准确的报告相当困难，但是，这却非常重要。
（3）投资指南和策略投资指南和建议定位是第三个将在未来普遍使用的技术。
在这里，我们的策略将依照主要的领域和承诺对市场部分作出详细说明，包括资产负债不匹配程度和暴露程度，以及特定类型系统性风险的对冲。
（4）激励合同和赔偿在某种程度上，管理上可以引入与一线管理人员个人激励机制相容的合同，然后减少复杂和昂贵的风险补偿需求。
然而，这种激励合同需要精确的定位和适当的内部控制评价制度。
外文原文：Source: Anthony M. Santomero,2007.“Commercial Bank Risk Management: An Analysis of the Process”, Journal of Financial Services Research ,pp.83-88Commercial Bank Risk Management: An Analysis of the Process AbstractThroughout the past year, on-site visits to financial service firms were conducted to review and evaluate their financial risk management systems. The commercial banking analysis covered a number of North American super-regionals and quasi-money-center institutions as well as several firms outside the U.S. The information obtained covered both the philosophy and practice of financial risk management. This article outlines the results of this investigation. It reports the state of risk management techniques in the industry. It reports the standard of practice and evaluates how and why it is conducted in the particular way chosen. In addition, critiques are offered where appropriate. We discuss the problems which the industry finds most difficult to address, shortcomings of the current methodology used to analyze risk, and the elements that are missing in the current procedures of risk management.Ⅰ. IntroductionThe past decade has seen dramatic losses in the banking industry. Firms that had been performing well suddenly announced large losses due to credit exposures that turned sour,interest rate positions taken, or derivative exposures that may or may not have been assumed to hedge balance sheet risk. In response to this, commercial banks have almost universally embarked upon an upgrading of their risk management and control systems.Coincidental to this activity, and in part because of our recognition of the industry's vulnerability to financial risk, the Wharton Financial Institutions Center, with the support of the Sloan Foundation, has been involved in an analysis of financial risk management processes in the financial sector. Through the past academic year, on-site visits were conducted to review and evaluate the risk management systems and the process of riskevaluation that is in place. In the banking sector, system evaluation was conducted covering many of North America's super-regionals and quasi-money center commercial banks, as well as a number of major investment banking firms. These results were then presented to a much wider array of banking firms for reaction and verification.The purpose of the present article is to outline the findings of this investigation. It reports the state of risk management techniques in the industry—questions asked,questions answered, and questions left unaddressed by respondents.This report can not recite a litany of the approaches used within the industry, nor can it offer an evaluation of each and every approach. Rather, it reports the standard of practice and evaluates how and why it is conducted in the particular way chosen. But, even the best practice employed within the industry is not good enough in some areas. Accordingly, critiques also will be offered where appropriate. The article concludes with a list of questions that are currently unanswered, or answered imprecisely in the current practice employed by this group of relatively sophisticated banks. Here, we discuss the problems which the industry finds most difficult to address, shortcomings of the current methodology used to analyze risk, and the elements that are missing in the current procedures of risk management and risk control.Ⅱ. Risk As a Central Ingredient To Industry’s FranchiseA. What type of risk is being considered?Commercial banks are in the risk business. In the process of providing financial services,they assume various kinds of financial risks. Over the last decade our understanding of the place of commercial banks within the financial sector has improved substantially. Over this time, much has been written on the role of commercial banks in the financial sector,both in the academic literature and in the financial press.These arguments will be neither reviewed nor enumerated here. Suffice it to say that market participants seek the services of these financial institutions because of their ability to provide market knowledge,transaction efficiency and funding capability. In performing these roles, they generally act as a principal in the transaction. As such, they use their own balance sheet to facilitate the transaction and to absorb the risks associated with it.To be sure, there are activities performed by banking firms which do not have directbalance sheet implications. These services include agency and advisory activities such as (i) trust and investment management,(ii)private and public placements through “bestefforts”or facilitating contracts,(iii) standard underwriting through Section 20 Subsidiaries of the holding company,or (iv) the packaging, securitizing, distributing,and servicing of loans in the areas of consumer and real estate debt primarily. These items are absent from the traditional financial statement because the latter rely on generally accepted accounting procedures rather than a true economic balance sheet. Nonetheless,the overwhelming majority of the risks facing the banking firm are on-balance-sheet businesses. It is in this area that the discussion of risk management and of the necessary procedures for risk management and control has centered. Accordingly, it is here that our review of risk management procedures will concentrate.B. What Kinds Of Risks Are Being Absorbed?The risks contained in the bank's principal activities, i.e., those involving its own balance sheet and its basic business of lending and borrowing, are not all borne by the bank itself.In many instances the institution will eliminate or mitigate the financial risk associated with a transaction by proper business practices; in others, it will shift the risk to other parties through a combination of pricing and product design.The banking industry recognizes that an institution need not engage in business in amanner that unnecessarily imposes risk upon it; nor should it absorb risk that can be efficiently transferred to other participants. Rather, it should only manage risks at the firm level that are more efficiently managed there than by the market itself or by their owners in their own portfolios. In short, it should accept only those risks that are uniquely a part of the bank's array of services. Elsewhere (Oldfield and Santomero, 1997) it has been argued that risks facing all financial institutions can be segmented into three separable types, from a management perspective. These are:(i) risks that can be eliminated or avoided by simple business practices,(ii) risks that can be transferred to other participants,and,(iii) risks that must be actively managed at the firm level.In the first of these cases, the practice of risk avoidance involves actions to reduce the chances of idiosyncratic losses from standard banking activity by eliminating risksthat are superfluous to the institution's business purpose. Common risk-avoidance practices here include at least three types of actions. The standardization of process, contracts, and procedures to prevent inefficient or incorrect financial decisions is the first of these. The construction of portfolios that benefit from diversification across borrowers and that reduce the effects of any one loss experience is another. The implementation of incentive-compatible contracts with the institution's management to require that employees be held accountable is the third. In each case, the goal is to rid the firm of risks that are not essential to the financial service provided, or to absorb only an optimal quantity of a particular kind of risk.There are also some risks that can be eliminated, or at least substantially reduced through the technique of risk transfer. Markets exist for many of the risks borne by the banking firm. Interest rate risk can be transferred by interest rate products such as swaps or other derivatives. Borrowing terms can be altered to effect a change in their duration.Finally, the bank can buy or sell financial claims to diversify or concentrate the risks that result from servicing its client base. To the extent that the financial risks of the assets created by the firm are understood by the market, these assets can be sold at their fair value. Unless the institution has a comparative advantage in managing the attendant risk and/or a desire for the embedded risk which they contain, there is no reason for the bank to absorb such risks, rather than transfer them.However, there are two classes of assets or activities where the risk inherent in the activity must and should be absorbed at the bank level. In these cases, good reasons exist for using firm resources to manage bank level risk. The first of these includes financial assets or activities where the nature of the embedded risk may be complex and difficult to communicate to third parties. This is the case when the bank holds complex and proprietary assets that have thin, if not nonexistent, secondary markets. Communication in such cases may be more difficult or expensive than hedging the underlying risk. Moreover, revealing information about the customer may give competitors an undue advantage. The second case includes proprietary positions that are accepted because of their risks, and their expected return. Here, risk positions that are central to the bank's business purpose are absorbed because they are the raison d'eÃtre of the firm. Credit riskinherent in the lending activity is a clear case in point, as is market risk for the trading desk of banks active in certain markets. In all such circumstances, risk is absorbed and needs to be monitored and managed efficiently by the institution. Only then will the firm systematically achieve its financial performance goal.C. How Are These Risks Managed?In light of the above, what are the necessary procedures that must be in place in order to carry out adequate risk management? In essence, what techniques are employed to both limit and manage the different types of risk, and how are they implemented in each area of risk control? It is to these questions that we now turn. After reviewing the procedures employed by leading firms, an approach emerges from an examination of large-scale risk management systems. The management of the banking firm relies on a sequence of steps to implement a risk management system. These can be seen as containing the following four parts:(i) standards and reports,(ii) position limits or rules,(iii) investment guidelines or strategies,(iv) incentive contracts and compensation.In general, these tools are established to measure exposure, define procedures to manage these exposures, limit individual positions to acceptable levels, and encourage decision makers to manage risk in a manner that is consistent with the firm's goals and objectives.To see how each of these four parts of basic risk-management techniques achieves these ends, we elaborate on each part of the process below. In section 4 we illustrate how these techniques are applied to manage each of the specific risks facing the banking community.(i) Standards and ReportsThe first of these risk-management techniques involves two different conceptual activities, i.e., standard setting and financial reporting. They are listed together because they are the sine qua non of any risk system. Underwriting standards, risk categorizations, and standards of review are all traditional tools of risk management and control. Consistent evaluation and rating of exposures of various types are essential to anunderstanding of the risks in the portfolio, and the extent to which these risks must be mitigated or absorbed.The standardization of financial reporting is the next ingredient. Obviously, outside audits, regulatory reports, and rating agency evaluations are essential for investors to gauge asset quality and firm-level risk. These reports have long been standardized, for better or worse. However, the need here goes beyond public reports and audited statements to the need for management information on asset quality and risk posture. Such internal reports need similar standardization and much more frequent reporting intervals, with daily or weekly reports substituting for the quarterly GAAP periodicity.(ii) Position Limits and RulesA second technique for internal control of active management is the use of position limits, and/or minimum standards for participation. In terms of the latter, the domain of risk taking is restricted to only those assets or counterparties that pass some prespecified quality standard. Then, even for those investments that are eligible, limits are imposed to cover exposures to counterparties, credits, and overall position concentrations relative to various types of risks. While such limits are costly to establish and administer, their imposition restricts the risk that can be assumed by anyone individual, and therefore by the organization as a whole. In general, each person who can commit capital will have a well-defined limit. This applies to traders, lenders,and portfolio managers. Summary reports show limits as well as current exposure by business unit on a periodic basis. In large organizations with thousands of positions maintained, accurate and timely reporting is difficult, but even more essential.(iii) Investment Guidelines and StrategiesInvestment guidelines and recommended positions for the immediate future are the third technique commonly in use. Here, strategies are outlined in terms of concentrations and commitments to particular aras of the market, the extent of desired asset-liability mismatching or exposure, and the need to hedge against systematic risk of a particular type.(iv) Incentives SchemesTo the extent that management can enter incentive compatible contracts with linemanagers and make compensation related to the risks borne by these individuals, then the need for elaborate and costly controls is lessened. However, such incentive contracts require accurate position valuation and proper internal control systems.。