The reform of commercial bank system is the primary problem. Whether it is a wholly state-owned commercial bank or a new joint-stock commercial bank in China, there are defects in institutional arrangements. The property right system of China state-owned commercial banks is essentially a single abstract form of natural person property right. The government exercises the property ownership of state-owned banks, and its functions are guided, controlled and supervised by the central government departments. This property right model has led to some bad situations, such as vague property right relationship, unclear risk-taking subject, low operating efficiency and benefit, and difficulty in maximizing profits. Therefore, in order to solve the current difficulties and problems of state-owned banks, it is necessary to reform the property rights system of state-owned banks, implement the shareholding system reform, and promote their transformation into modern commercial banks in the true sense.
In addition, in order to establish an effective risk prevention and management mechanism, we must narrow the gap between the risk management level of state-owned commercial banks in China and the international level, and reduce the deviation in understanding. First of all, we should establish an advanced concept of bank risk management. The task of risk management is to find the risk points of business process, measure the risk degree of business, and create benefits from risk management while overcoming risks. Secondly, it is necessary to establish a comprehensive risk management method, and bring credit risk, market risk and various other risks, as well as various financial assets and other asset combinations including these risks, as well as various business units undertaking these risks into a unified system, measure and sum all kinds of risks according to unified standards, and control and manage risks according to the relevance of various businesses. Third, improve the risk management system. It should be adjusted from three levels: (1) It should adapt to the changes in the ownership structure of commercial banks and gradually establish the risk management organizational structure under the management of the board of directors. (2) At the implementation level of risk management, we should change the administrative management mode, gradually realize the horizontal extension and vertical management of risk management, and realize the flattening of management process on the basis of matrix management. (3) Change the traditional internal management mode of commercial banks, realize a management system centered on business processes, and constantly explore a risk management system centered on strategic business entities. It is necessary to gradually establish a separate risk management department in the business department, and transfer and implement risk management policies among departments through the risk management department to effectively control the source of business risks. Finally, we should improve the risk management technology. Advanced risk measurement and management techniques can be used, such as internal rating method and portfolio management.