The Management Of Financial Risk In The Process Of EU Financial Integration

On January 1, 1999 the Euro as the single currency of the European Union countries officially launched, marking the European integration has entered a new stage, thus removing the obstacles for the European monetary integration. Euro is very useful to the European economic integration and political alliance, therefore, on this basis, the consideration that European Union member states want further European financial integration is necessary. The financial is a core of the country's economic development, will determine the quality and speed of a country's economic development, therefore, the safety of the financial system will have a bearing on the stability of the whole development of the national economy and security. In order to ensure the financial security, and efficient development, we have to consider the financial risk management. Financial risk is a kind of risks. From the financial inception, it is objective and we can not avoid this problem, if handled properly, or mismanagement, which will cause small runs and entered the bankruptcy, the largest arising from the financial crisis, and even political upheaval. For example, Bahrain bank failure, Japan's Japan, in 1997 outbreak of the Asian financial crisis, is due to fault solution to avoid potential financial risks.European financial integration is the only way to European integration, including the integration of financial markets, the EU financial services integration, and the EU integration of financial supervision. EU financial integration with the development of the money market and capital market gradually opening up, EU economic relations among the member states more closely, the original exist in a country's financial risks, and now expanded to the whole EU. In the European Union, this is how supra-national level, the prevention and management of financial risks, is the need to study this issue.At the same time, China's economic development and reform process is also facing a lot of financial risks, and although the form and content of financial risks are different from that in the financial integration of EU, but in essence, the characteristics of financial risks remain the same. China's market economy is now in the initial stage of construction, and financial laws and regulations are not perfect, the regulatory system is not perfect, the banks and other financial institutions,management still needs to be enhanced ,the financial risk management are in the world backward level. With the reality of our country, our existing financial risks: credit risk, liquidity risk, market risk. In accordance with the sequence of studying problems, this paper has three parts:The first part instructs the financial risk-related concepts and financial risk management theory. The financial risks are the possibility of loss engaged in the process of economic mainstay in the financial intermediation. In a modern market economy a condition, as economic globalization and regional economic integration has been continuously strengthened, not only financial risks exist objectively, and to a large extent, it reflects the main micro-economic and macro-economic risks of operating the operational risks. Financial risk is an objective existence, to what kind of form, and how far there is a lot of uncertainty in the financial industry in economic development. Due to the core status of financial, financial risk has the character of society, meanwhile, have characteristics of hidden risks, controllability, expansion. This paper is a brief introduction to the financial risk management disciplines, including "efficient market theory" capital asset pricing theory, arbitrage pricing theory, option pricing theory.The second part is the development of EU financial integration, financial risks the EU facing, and in the financial risk management measures adopted and should draw in some places. The emergence of the euro will greatly promote the process of European monetary integration, speed up the integration of the European banking sector development, but the integration of European financial markets is not good, which was in a state of segmentation. In the background of positive development of the financial integration, the EU facing major financial risks exist in the system of the European Union and out of the European Union, namely the euro as a single currency against the dollar continued appreciation, causing the exchange rate risk, and as the EU member countries the gap between the level of economic development arising from market risks. At the same time, there are still traditional credit risks and financial institutions vulnerable to liquidity shortage. In the management of financial risks, the major measures taken by the EU is the establishment of an efficient financial management system. Some specific initiatives include the following: First, the EU financial services sectors to accelerate the integration process have reached a political agreement. Second, the European Commission adopted Economic and Financial Committee on the financial stability of the two (April 2000) and the financial crisis management (in April 2001). The third is the "elite committee" on the European securities market regulation report recommends reshaping the field of securities supervisory procedures. Fourth, establish a cross-sector cooperation informal control mechanisms.The third part, this part is divided into two levels. First is China's existing financial risks, and another is to learn from the EU experience in China's financial risk management methods and countermeasures. China's existing financial risks include macroeconomic financial risks and the risk in the operation and management of financial institutions. The former includes: Firstly, the international floating capital and the outbreak of the financial crisis, and the second is excess domestic liquidity and inflation pressure has increased. The latter include the quality of financial assets caused by the deterioration of credit risk and operational risk and the risk of moral hazard. Against these risks, following measures mainly should be taken, improving the financial regulatory system, the main supervision should be civil, government regulation, supplemented by the introduction of incentive regulation philosophy, the sub-sector regulators to change gradually mixed supervision. At the same time, strive to improve the quality of the team staff, build international level team. In addition, financial institutions strengthen their ability to resist risks should do the following: first, to adapt to the international norms, the soundness of financial institutions and management system. Second is to maintain domestic political and economic stability, and resist country risk. Third, optimizing the economic structure, and improve enterprise efficiency, and increase our awareness of risk management. Forth is the introduction of cost-benefit concept, promote flexible and effective financial supervision. The fifth is to strengthen the risk management of commercial banks, the introduction of advanced risk management practices. Sixth is changing the mode of economic growth, and establishing a modern enterprise system. Seventh, actively participate in international economic cooperation and exchanges and introduce advanced financial risk prevention and control experience.