Empirical Research On The Risk Control Of National Security Institutes In Stock Investment

Since 1980, the global market has been remaining unstable that several international investment banks bankrupt or received huge loss. National security brokers survived as the national capital market is not completely open to the world. However, the administration structure with several faults, unitary main business and in comprehensive risk control system leads to illegal operations. Especially bad situation of the security market remains since 2004 with more than 30 national security institutes have been reconstructed or even bankrupt. What's more, from 2009, a certain number of security institutes executed backdoor listing, intending to flourish by means of the power of the financial market. As the fast development of national financial market, multileveled market structure is being established. National security institutes not only have to face domestic competition, but also international challenge from foreign investment banks. The better material and immaterial ability as well as diversification, standardization and professionalization are most urgent. Also we have to consummate overall defense, control and alert against any kinds of risk.The article first turns to the security institute's theoretical knowledge of risk control, from foreign investment bank's theory of risk control to bringing in Basel Agreement to manage and monitor national financial market. Secondly, it comes to the literature on security industry and risk control. Then it gives a light introduction of the history of national financial market, by which the existing problems in the developing progress of national financial market and security industry. Simultaneously the problems in security institutes is fully analyzed, including the shortage in the governance on security institutes, single earning mode, weak ability to defend risk of small institutes, illegal operation, etc. Looking into the risk control system of security institutes including brokerage, underwriting, investment and margin services, a comprehensive conclusion of every kinds of risk to be faced with is made here. Finally measures which should be taken in future are picked up through the analysis on foreign investment bank's measure to control the risk and national actual situations. Meanwhile the value at risk is to be analyzed by VaR with the Hushen300 index statistics from 2005 Jan 1st as the measurement of the portfolio of self-operated business, hoping to contribute the establishment of perfect national risk control system.