Financial System On Risk Management: An International Comparison And Inspiration To China

Since 1990s, the frequency of financial crisis rises gradually. Fluctuation and risk have presented in the traditional system financially and economically. There is evidence in developed and non-developed countries that the rate of economic development fall slowly by the bank's bad operation or stock market shaking frequently . It has been in the spotlight that how to ensure the formal finance and reduce risk in view of the present situation.On the base of research findings about financial function, the analysis of two different systems begins from the function of risk management. On the one hand, it can reduce the non-system risk by using the modern portfolio theory and the investor can choose the way of risk management with the derivative instruments in market; on the other hand, the model of cross-stage risk sharing (Allen and Gale) proved that financial intermediary's special operational system can avoid the loss which is caused by system risk. For illuminating the difference, Germany and America are chosen as the example through the qualitative and quantitative analysis means. As a result, the bank-based financial system of Germany is better than the market-based system of America in risk management. So, combined with the special situation of the risk in the financial system of our country, the advice is given in the paper.