The Research On Risk Management Controlling Of In China Stock Market

Securities market is a certain stage a particular stage in the economy development and plays an increasingly important role in the capital markets. While securities companies are seeking their own development process, a variety of risks follow consequently which affect the development of securities companies greatly. Especially from the 80s of last century, the international capital market confronts crisis, many investment banks bankrupted and experienced huge losses, the domestic securities companies also stepped into a depressed market conditions in which the securities of companies are with bankruptcy and closure, thus industry-based system risk came out. Today, China's securities companies not only have to compete with the domestic counterparts, but also the challenge from foreign investment banks, therefore, it is imperative for securities companies in China to strengthen risk control and improve their competitiveness. Various risk models that established by foreign investment banks by practice are now the world's most comprehensive risk management system, which using quantitative and qualitative analysis to control and forecasting risk. Despite so-called perfect, risk control management system still can not behavior perfectly in the forecast work of the financial crisis in 2007, which means it still needs to continue research in practice, improve, until a real perfect. Despite the financial crisis in China is not profound as foreign countries, and China's securities companies do not feel so deep about the crisis, they can not ignore that the development of the securities industry is accompanying with various risks. In the development process, risk management system of China's securities companies is not perfect, and is not good as the mature markets of foreign risk management. There is a large gap. Although with international development, foreign management experience of quarantine securities companies was learnt, for China's securities companies, it is still in the stage of exploration and adaptation, without an own set of complete management system. The shortcomings of risk management in the financial crisis shows that foreign risk management system still requires the joint efforts of research to find a more appropriate risk management control system in both theory and practice. In this article, through analysis of the status of risk management controls in China's securities companies, it tries to identify deficiencies in risk management and internal control of China's securities companies and then analyze them as well as make recommendations.This paper is divided into five parts, the first part starts with the internal control and risk management theory, illustrates the set of risk management and internal control theory and definitions, as well as the relationship between these two concepts. In the second part of this paper, the domestic status of the securities company's risk management research is analyzed and the foreign developed markets risk management system is compared with China's and thus to identify deficiencies in our risk management control. In the third part, through analysis and comparison of securities firms'measurement models, judgment on the risks of securities companies is based on entropy methods. In the forth part, through a reasonable quota system analysis on the securities company, this paper identifies warning indicators for China's securities companies. And logic model is utilized in the empirical analysis. In the fifth part, suitable risk control measures for China's securities companies is well identified through the analysis of i securities companies mentioned above.