Study on the Impact of Incentive Mechanisms and Internal Control Systems on Risk Management in Commercial Banks

Abstract

The operational risks for commercial banks could be divided into four scenarios, which are the risks caused by malicious act, rational choice, inadequacy of capability and unconscious choices. Furthermore, these "initiatives" can be reflected in financial corruption, moral hazard, bounded rationality and irrational behavioral tendencies. Operational risk has become one of the three main risks for commercial banks since The New Basel Capital Accord released in 2004, together with credit risk and market risk. This article accordingly puts forward related proposals of the commercial banks’ operational risk management.

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Q. Zhang, "Study on the Impact of Incentive Mechanisms and Internal Control Systems on Risk Management in Commercial Banks," iBusiness, Vol. 5 No. 3B, 2013, pp. 154-157. doi: 10.4236/ib.2013.53B033.

Conflicts of Interest

The authors declare no conflicts of interest.

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