Trust Company Financial Risk Management

In the past20years, China’s economy maintained a high growth. The residents’ demand for finance and investment are increasing rapidly. Our current financial system are separate operation and separate supervision. Compared to other financial institutions, trust companies can cross the money market, the capital market and the industrial market. Trust companies invest more flexibly and its investment scope is broader. In recent years, the trust assets grows rapidly and continue to record. Now its scale are only lower than banking sector assets. A huge risk hidden behind the tremendous growth of trust assets. How to effectively manage financial risks are the core competitiveness of the trust industry’s long-term development.In the theory and practice of business management, financial risk management and contorl is a very important part. This paper is based on the theory of financial risk management. I analyzed the external enviroment and internal enviroment of trust industry, proposed financial risk management approach which is the combination of qualitative management and quantitative management and provided policy recommendations for trust business in China which has important theoretical and pratical significance to improve trust companies to manage financial risks.This article summarizes research in related fields at home and abroad and analyze the development of trust industry in recent years. The data includes the total size of the trust assets, the use of trust assets, the invest of trust assets and other respects. According to the recent frequency of payment crisis, the paper study the enviroment of the trust industry, as well as trust companies and propose that trust companies must strengthen their own financial risk management capabilities in order to achieving long-term development.About trust company’s financial risk managent system, the paper argues that trust companies should strengthen internal control, establish comprehensive risk management system. According to different types of business, trust companies should establish credit evaluation system in advance. After then, trust companies should establish financial early warning system. So that the trust companies can effectively manage financial risk and strengthen their self-strength incompetition with other types of financial institution. At last, the trust industry can realize long=term healthy development.