Financial Risk Early Warning System And The Financial Risk Prevention Research Of Henan Province

The characteristics of infectivity and diffusibility of the finical risk could spread the localized risk to other social and economic departments, and thus form final risk for the entire financial system. And when this situation grows up to a certain extent, the large scale financial crisis for the entire financial system would break out. Even under balance conditions of the total macroeconomic, if financial risk happens in some areas, then regional financial crisis would be caused too when the risk accumulates, and because of the power of economic globalization and economic integration, the regional financial crisis would spread to the whole country and other countries and regions through a variety of ways, causing the whole national and even global economic crisis .There are a lot of issues during the development of financial industry in Henan Province, such as low proportion of financial-related, slow development of direct financing, the financial industry having fewer contributions to the economic development, slow growth rate of deposits and loans, low profitability of the banking sector, little per ownership of finical assets, not high quality of financial assets, the breadth and depth of the insurance market lagging behind the development, poor finance ecological environment, etc. A large number of financial risks are accumulated by these issues during the entire development of Henan Province, which are becoming more and more important constraint factors of the economic development of Henan Province. Therefore, How to effectively and accurately monitor and prevent the financial risks has become the most important task of economic development in Henan Province. Based on analysis of risks faced by the financial industry and market environment in our province, referring to research results at home and abroad, and according to the specific situation of China and Henan Province, this article attempts to establish a risk early warning indicator system which meets the characteristics of finical industry of Henan and covers banking, securities and insurance industries in Henan Province and tests it with actual data of Henan Province before getting the corresponding financial risk prevention policy. This article This article first briefly reviewed and summarized the theory context of the development of the financial risk early warning system, defined the concept of financial risk and financial risk early warning system, analyzed financial risk factors and financial market conditions in Henan Province, summarized the characteristics of financial risk in Henan Province, and pointed out the difference on the financial risk early warning system between Henan Province and the whole country.Then the article selected Henan Province as the financial risk early warning indicator, analyzed the fundamental factors that may make financial risk happen in the respect of asset quality of financial institutions scale and financial system in our province; And according to characteristics of financial risks of different sub-industries, it analyzed the forms of financial risks in our province, found the affect factors and warning signs of financial risks, selected the four major sub-system of indicators including banking, insurance, securities and regional financial environment and determined the critical value of each indicator and early warning interval. Then for getting the weight of financial risk early warning indicators in Henan Province, the article talked about AHP(Analytic Hierarchy Process), and got weight value of each indicator through AHP general process of calculating weight, then through consistency checking, the overall weight value of each indicator was gotten finally. The article introduced constructing the financial risk early warning indicator system of Henan Province at the end, evaluated current status of financial risk with related financial data of Henan Province, determined the overall financial situation of the regions and issued the appropriate warning instructions, presented relevant preventive measures for financial risk in Henan province, based on analysis of characteristics of financial risk and the establishment of early warning system for financial risk in our province, proposed preventive measures of financial risk in our province in the respect of both micro and macro, and provided policy advice for making guiding principles of financial risk management and improving financial market environment of Henan Province.