The Empirical Study In Mesurement Of Overseas Financial Assets Risk In China Financial Institutions

With economic globalization and integration, the depth and breath of participating in international financial markets has been deepen for china's financial institutions.The connection between china and foreign capital market is getting inseparably associated, but at the same time, the volatility of financial markets has intensified. The exchange rate will also be greater volatility and uncertainty as the pace of the appreciation of the Renminbi is accelerating. When investing overseas assets, investment institutions not only consider the risk of the fluctuations of price, but also consider changes in exchange rate. At the same time, there would be great challenge for financial institutions in the aspect of foreign asset management. As we all known, the producedures of foreign assets management mainly include:identifying risk, choosing the method of risk management, carrying out risk management, superving and adjusting, while the important precodition and core of foreign asset risk management are the fiest two produres. How to effectively manage the risk of foreign assets in order to ensure stability of financial institutions and maximize the revenue.The paper adopte theoretical and empirical research methods. It started from the overseas financial assets of financial institutions, risk identification departure, focuses on the value at risk model-VaR (Value at Risk) method. In this paper, the modified VaR model outside the financial assets of financial institutions are facing price and exchange rate risk for empirical research, after test after test, and ultimately determine whether the modified VaR model to measure accurately the risks it faces. The results show that the improved model can accurately measure VaR offshore financial market risk assets. Finally, conclusions of this paper and some prospects on the VaR model.