It has been said that: “Good risk management requires good ethics; and good ethics requires good risk management.” Do you know why good risk management and good ethics should work together? The report will begin with definitions of these two fields. First, risk management is a process for making decisions that aim to minimize an organization's business losses and reduce the number or magnitude of those losses. For ethics it seems like a norm that aims to respect certain rules or achieve certain results in particular types of situations. Obviously, their relationship seems like two sides of the same coin. Because an organization wants to manage its risks well, everyone who represents it must practice good ethics. With China planning to gradually open up its banking sector and steadily introduce new businesses, commercial banks are facing increased pressure on risk management. Operational risk is the inherent risk of commercial banks and cannot be avoided completely. However, it was found that operational risk was mainly derived from credit risk and related to ethics in risk management. There are the same line graphs as follows: So ethics plays an important role in the field of risk management, we can see the graph above, which is the basis of the connection between operational risk and credit risk.2. Some events related to themThere were some cases which showed the effect of credit risk due to operational risk and many banks suffered huge losses. Even worse, some banks have failed because of this. In other countries, for example, in 1994 the Bankers Trust was investigated by Procter & Gamble for deception and fraud in the trading of derivatives, which... middle of paper... simulate the corresponding calibration method according to the characteristics of China . Furthermore, we can create application programs for bank credit risk regulation and help financial institutions (and even individuals) make sensible decisions. Therefore, they could effectively carry out decision making and risk management. We should care about ethics and do some research as follows: (1) How to help commercial banks in China better understand their risk management; (2) How to build a risk management framework for banks in China; (3) How to set some critical risk alert levels. These will be situations where neither good or bad ethics, nor good or bad risk management are so black and white, and where together we can think about how to let good ethics and good risk management work together to the ultimate benefit of all.