Applied Research of Entropy in Comprehensive Evaluation of the Risk of Commercial Banks

Risk management is the core of commercial bank management, from the broking out of U.S. substandard loan crisis and the closing down of commercial banks, we can see the important reason of suffering heavy losses is that commercial banks did not properly assess a series of facing risks. At present, China´s commercial banks risk analysis is still in the traditional objective qualitative analysis phase, as for risk quantification, especially comprehensive evaluation is not enough. The paper is from the perspective of commercial bank supervision to building a commercial bank risk evaluation index system, to establish an uncertain evaluation model based on entropy to determine the weights, and through giving the example of Industrial and Commercial Bank of China and Huaxia Bank, it assessed the risks of commercial banks quantitatively and comprehensively.