Research On Improvement Of Risk Management Of Trust Company Based On COSO-ERM

Trusting industry, as one of the four pillars of Domestic financial industry, has developed rapidly in recent years. Up to now, the assets under management have breakthrough10trillion. However, we should notice that, since the mid-1980s, government has made six rectification of trusting industry, and behind every rectification, what we can find is the lack of risk management ability. Investigate its reason, the regulatory system is not perfect, besides, the risk management system of trust companies still exists defects.Chinese academic circle’s research on the risk management system of the trust industry is relatively less, and most of the research focuses on some specific trust business risks, which lacks of thinking from a trust company as a whole. This thesis used research methods such as literature investigation, analysis and case study, to find the current situation of risk management system of A Trust Limited and how to achieve optimization on its risk control.This thesis summarized research achievements about the comprehensive risk management and risk-manage system in trust companies both at home and abroad in the first, and then analyzed related theories. Then, this thesis classified and summarized the risks faced by China’s trust companies, and analyzed the present situation of risk management of the trust industry. To analyze the situation of risk management in A Trust Limited, the COSO-ERM framework has been used to design the questionnaire, and from the three dimensions of the framework with eight elements in a given priority, this thesis found the corresponding problems, mainly includes:the unreasonable equity structure, departments’risk attitude is not unified, awareness of risk management are insufficient, the structure of the organization has defects, conflicts between business department and risk-control department, lack of complete and effective risk-identification system, lack of overall preparation of risk response in advance, effectiveness of control activities remains to be improved. Finally, to solve these problems of risk control in A Trust Limited, suggestions include:(1) use COSO ERM framework to establish three-dimensional risk management system;(2)improve the internal environment: establish a diversified ownership structure, optimize the internal organization structure, reinforce human resources management;(3) combining the risk management, optimize the goal setting;(4) build effective risk identification and assessment system;(5) establish and perfect the risk warning management;(6)reinforce the effectiveness of control activities:optimize the funding approval authorization mechanism, strengthen the due diligence;(7) standardize the business process management;(8) optimize the risk dissolve and buffer mechanism:perfect the trust compensation reserve system, improve the trust products’liquidity, build internal and external capital flow platform mechanism.Compared with the research achievements in existence, which discussed risk control from the business level, the main innovation of this thesis has two aspects: First, according to the characteristics of A Trust Limited, use COSO-ERM, the authoritative framework in risk management, to conduct the questionnaire survey, leam the characteristics and existing problems in current risk management system of the company, and find out the gap between risk management system in this company and a perfect one; Second, on the basis of the results of the questionnaire survey, put forward concrete suggestions on optimization of A Trust Limited’s risk management system from eight aspects, and has strong significance in practice. Besides, since the problems have certain universality, the presented optimization suggestions provide a valuable reference for the trust industry risk management system.Due to limited time and personal ability, the design of the questionnaire needs to be improved, and the analysis may also have some deviation, despite supplementary interviews on specific individual staff, it remains to be consummated. In the future research, adopting a more comprehensive investigation method and obtaining more quantifiable data, can help to find more accurate problems in trust companies’risk management system, and provide the basis for a more comprehensive optimization measures. On the other hand, this thesis focuses on finding the problems in risk management system of A Trust Limited, and putting forward the relational optimization suggestions, but in terms of risk management techniques, it remains to be strengthened. In the future study, the author will try to combine more finance related theory, and refer to the latest research on risk management techniques, both domestic and abroad, to carry on a more in-depth analysis on the optimization of risk management system.