Study On The Risk Management Of Mixed Operation Of Commercial Banks

From the overall point of view, China’s financial services inclined to gather in the urban areas, financial resources in the rural areas are relatively scarce. Financing difficulty and fund shortage have been important factors which restricting the sustainable and healthy development of rural economy.The theme of this paper is the commercial banks’risk management in mixed operations. The risk control is the key to mixed operation. This paper is made up of four parts. First of all, we summed the theoretical basis of mixed operation by study the relevant theoretical literatures at home and abroad. We also introduce three main forms of mixed operation:the German universal bank model, the British single financial holding company model, and the American pure financial holding company model. In the second part, we analyze the risks of mixed operation and its causes. The main part of this paper is about the cooperation of Taicang ABC and microcredit companies. We analyze the feasibility and risk management of the cooperation. The last part of this study is the conclusion and the suggestions on how to minimize the risk and maximize the advantages of mixed operation. Four main suggestions are concluded as follows:first, improve the legal system to reduce the risk of interest conflict; second, strengthen the supervision mechanism to reduce the systemic risk; third, strengthen the legal concept and the awareness of credit to weaken the moral hazard; at last, set up a perfect risk prevention system.