Valuing the internal control system in terms of operational risk management in commercial banking

Globalism, fast changing process resulted from the improvements in financial products and technology increased the financial risks that received by the banks. The banks, facing with the several risks, started to pay more attention to internal control and risk management systems because of these risks.Financial instability in one country caused the instability and crisis in other country because of the integration between the financial sectors, this situation marked to necessity of the internal control system. One of the most important reason to establish the internal control system is to take precautions from the risks. In our research,we will try to analyze not only the oldest and potentially the most dangerous but also resourcing (causing) a lot of risks especially credit risk and market risk, operational risk approved as a discipline in 2001.In the first part of our research, we will handle the term `internal control? ,developments and arrangements about the internal control in Turkey. In the second part, operational risks occurred in the banks, measuring these risks, quantify these risks and funding operational risks, briefly we emphasize operational risk management. In the last and exercise part, we will put Halkbank in place to assess effective internal control from the aspect of operational risk management. In this part Halkbank will be introduced briefly, focusing on the bank?s internal control system and operational risk management system, defining the operational risk points for the some important departments which has placed on the organization scheme and we will try to lighten up the effects of internal control applications on those points.Taking all in to account the main purpose of the research is assessing the importance of effective internal control system from the aspect of operational risk management in commercial banks. Other purpose is explaining the process of the internal control system and operational risk management system in detail.The importance of the research comes from the emphasizing the internal control system and the vital importance of having the internal control system function to define operational risk factors.