Huarong Asset Management Corporation Commercialization Of The Restructuring Process Of Risk Management Research

More than a decade ago, separated from China’s four major state-owned commercialbanks out of the four asset management companies, the presence of the Asset ManagementCompany for the financial sector in China is of great significance, they are produced in linewith the socialist economic construction. However, with the deepening of socialist reform,China has successfully joined the WTO, the successful listing of the four state-ownedcommercial banks, the asset management company’s historical mission has been completed, ifnot commercial restructuring will be difficult to continue to develop.China Huarong Asset Management Corporation is a wholly state-owned non-bankfinancial institutions approved by the State Council in1999established a total of32officesand10platform companies in the country. In order to accommodate the development of thetimes and the new economic situation, Huarong began to plan the commercial road to reform,Huarong’s second venture, is a reborn important moment.Huarong currently used five three-step "development strategy, namely vigorouslyimplement the strategy of" customers ", and take the road of commercialization and the timelyintroduction of strategic investors choose the listed company’s leaps and bounds. To build upthe new development pattern of "One Body Two Wings", combining company headquarters,offices and subsidiaries. Commercial operation, the need to focus on the sources of businessand market-oriented mode of operation, expanding business areas, expanding market space,before resources are the countries to, after the restructuring, and the resources to completelyown strength from the market, which entirely by the companies themselves to deal with therisk. In the enterprise business process, a series of risk facing legal risk, financial risk,operational risk, internal control should be strengthened. However, the need to focus on themain business of asset management and collaborative development of a full range of financialservices, asset management, after all, the principal business of asset management companies,can not be abandoned because of new business expansion "fundamental". Its risk managementcan be described as one the most important work in the management of the business.In this paper, Huarong Asset Management Corporation commercialized restructuringcases, the restructuring of state-owned asset management companies in the risk analyzes, andfrom the point of view of accounting adjustments related to the carrying and handling wereanalyzed. The original policy set of books of accounts should be transferred to acomprehensive set of books in the commercialization of the policy clear set of books, which isactually equal to retrospective adjustments made. Adjustment in the accounting records, theneed to determine the base date of the restructuring, the matter will need to be adjusted forloss to "adjusting events matrix" for each of the events behind the restructuring adjustment toadjust the transition table, the table of contents will transition copied Business of the set ofbooks.In addition, the question of financial institutions are facing many risks, select arepresentative legal risk and credit risk, conducting research, the focus of Huarong legal risk, credit risk and internal control work. Natural risks faced by enterprises, business risk andother final often manifested in the form of legal risks. Legal risk in a lawsuit has not onlylimited, and in all stages of business will involve legal risk. A different risk point, corporatelegal staff is not the same precautions. After the restructuring of the financial holding group’saffiliates, subsidiaries will involve a number of industries, and different regulation of theindustry standards and methods and different, which requires companies to determine therisks for the standards and ability to resist risks be treated differently. Companies are for profit,if the asset to the Group’s internal monitoring standards are low sectored shifts, the entiregroup’s overall legal risk will improve the company’s overall security will be reduced.Companies need to face a lot of legal risk, where the first is the contract management risks.However, in many legal risks are concerned, the risk of intra-group transactions associatedwith the most prominent. Face legal risks, Huarong company has also taken a number ofmeasures to deal with, such as creating legal risk indicators and constantly updated;strengthen the comprehensive training of personnel, focusing on records management;establish effective incentives, a sound legal organization; focus on related party transactionmanagement, to take avoidance system; increase information disclosure efforts to improveearly warning risk identification consciousness.Credit risk is targeted venture capital, the actual situation on the Huarong, the managedobjects should be "exposed to the credit risk under" assets, including commercial acquisitionsof non-performing assets, leased assets, bank credit assets. Huarong in the daily management,to control these assets are non-performing asset ratio, under normal circumstances, only in thecustomer defaults, the only provision in. China Huarong to conduct credit risk management,from risk identification, measurement, monitoring and control to proceed. China Huarongusing due diligence, approval and other review processes and use of product manuals, entrystandards and other institutional documents to identify credit risk. However, due to ChinaHuarong is a comprehensive, cross-regional operation, although investigators due diligence orcredit risk will inevitably occur. Huarong some of its subsidiaries have established an internalrating system, the customer’s risk rating and debt sorting, calculating and measuring theprobability of customer default default loss rate. Currently, however, the internal credit ratingsystem evaluation, mainly qualitative, quantitative, supplemented, as the Group did not agreewith the customer rating criteria, so I can not do all of quantification, there are differentdepartments within the group over the phenomenon of credit. Huarong has its own "customerclassification management approach", under this approach, for offices and subsidiaries forunified management. But only for non-performing asset ratio Huarong and fund overdue ratemonitor. As a further refinement can not be done, so the classification of credit assets willinevitably rough, credit risk monitoring priorities tend to be customers after default. Huaronghas been based on their ability to resist risks of capital, development of risk policies,allocation of economic capital, the implementation of quota management. Credit risk in theface when Huarong credit risk management should also be a clear object, the establishment ofa unified internal credit evaluation criteria, subdivided credit assets, an early warning role.After the restructuring of China Huarong is a combination of banking, trust, futures, andother financial products as a financial holding group, operating a wide range of complex organizational framework, its risk management and control system would be relativelycomplicated. Within the Group subsidiaries, branches directly to each other share-holdingassociated phenomena such as the risk management work of great difficulty. Establish goodinternal control environment should also be in the business sense, strong internal controlsystem, and internal operation mechanism, use of power control mechanism, audit andsupervision, outside the control of several aspects such as strengthening effortsChina Huarong’s example tells us that not only policy-oriented financial institutions canfeed themselves, commercial financial institutions to be more profitable for themselves.Currently, Huarong offices, subsidiaries, and constantly improve the internal control system,risk management, organizational framework is also basically formed. However, due to thescale of commercial enterprises in expanding the company’s future risk management there arestill many areas for improvement. With the company’s in-depth restructuring of commercial,risk management and control will be a long and arduous task. Company departments shouldactively respond to the risk management requirements, a clear division responsible for thecompany’s successful restructuring of escort for the company after the restructuring, rapid andhealthy development and lay a solid foundation.Learn restructuring of Huarong’s risk management work, not for commercialrestructuring of the Orient Asset Management Corporation and the Great Wall AssetManagement Corporation has important reference significance.