Abstract

This paper introduces the theory of incentive mechanism design into research on operational risk of stated-owned commercial bank. First, principal-agent theory is used to analyze operational risk of stated-owned commercial bank. Then, game theory of incomplete information is applied to detect probabilities of operational risk which caused by internal factors of stated-owned commercial bank. Finally, mechanism design theory is adopted to explore an incentive mechanism that could effectively prevent the risk of internal operation in stated-owned commercial bank.

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