Research On Risk Management Of The Financial Company Of Enterprise Group

Along with the vigorous development of enterprise group and financial market,a number of the largeenterprises have gradually explored the way to link industrial capital and financial capital,in order to widenthe financial channel and improve capital efficiency.As the bridge between the industrial and financialcapital,financial companies emerge at a historic moment.At present,the research on financial company has centered on its function and the development modeland stressed on practical experiences.However the study of financial risk management is rarely discussedwithin an integrated system logistically.In reality,the enterprise needs to establish a finance companywherever it was in.But another factor is that in the transformation process of economic and financial systemfrom the planned to the market economy,the development of financial companies presents a hysteresis.Theappearance of some illegal operations and the cases of business failure urge the general concern of financialregulatory institutions and scholars in all walks of life on the risk management of financial companies.The Standard analysis model is used in this paper for reviewing the risk management in financialcompanies of enterprise groups aimed to build a risk management framework properly.The current theoryof risk management is normally named comprehensive risk management theory which has been developedfrom the basic theory of insurance risk management.This article based on the comprehensive riskmanagement theory,or the ERM framework named by the Commission.Firstly, literature research method isapplied to define the concept of financial company, analyze its characteristics,and find out the remarkablecharacteristic which is the dependence relation between finance companies and the enterprise group.On thebasis of the research,the paper intends to summarize the characteristics of financial companies,the current situation of risk management,and the causes for the emergence.Secondly,this paper expatiates on is thedifferences of risks between financial companies and commercial banks with a comparison research.Finally,the risk management framework of financial company to build on the eight elements:Firstly,optimize the internal environment. Internal environment centers on the risk managementframework.In theory,the internal environment affects the goal-setting,information dissemination andcommunication,and the implementation and enforcement of the monitoring activities.Synchronously,itprovides the measures to assessment and response of the risk.In practice,financial companies are dependenton enterprise groups observably,which is different from commercial banks.This situation may remainpossibilities of increasing risks.Therefore,the only way to optimize the internal environment,strengthen thefinancial independence of the company,before inhibition from the source of risk Secondly,set the target offinancial companies.The goal is the main drivers of behaviors,which provides guidance to behavior.For theoriginal establishment of the finance company is to provide financial services for the enterprise group,buttoo much emphasis on the service function is easy to weaken the independence of the financial companies.Financial company’s strategic objectives which were set should not only be based on the positioning ofnational policies on the financial companies,but also need to meet their own development needs.Thirdly,prevent discrepancy between the risk management and business activities that in order to made the riskmanagement to have directive significance for practice.The author,in accordance with the businessactivities of finance company,made clear sense on the identification, assessment and response of risk.Andthen the target of insuring the safety and controlling risk would be achieved by monitoring and guarantyingall activities in the financial companies.Fourthly,strengthen the transmission of information andcommunication in financial companies.The information and communication could integrate all elements inthe risk management and then form a comprehensive risk management system.Finally,changes of whatever internal or external environments may influence the efficiency of the risk management in both positive andnegative ways.Financial company shall appoint a relatively independent department to evaluate theeffectiveness of risk management,to report the conclusions and opinions timely,and to check theimplementation of the proposed measures,and protect the effective risk management.Based on the above analysis,two concernful points could be summed up.Firstly,the vital thing neededto be concerned properly includes intensify the management and control of financial company.secondly,optimizing the internal environment has the ability that securitizing the efficiency and validity of the riskmanagement.The innovation of this paper is to strengthen the core position of the internal environment inthe risk management of financial companies,and to build a risk management organization chart of financialcompany.