Research On Risk Management Of China’s Trust Companies

Recent years, China’s trust industry, as a new force, rises abruptly, in the post crisis era, the industry management of the trust assets scale achieved stable and grew rapidly. Under severe financial circumstance, trust, trust income profits and so on are still mid high. By the end of the second quarter of 2014, the total size of trust assets managed by the trust industry, achieved a new record high, more than the insurance industry. In spite of the rapid development of China’s trust industry, in the meantime, there is potential danger---- rigid cash. In fact, speedy development trend of trust industry in recent years also is in relation to rigid cash which brings about zero risk. But in the effect of the rigid to the trust, the trust company takes all the risks for investors. In hence, how the trust company makes risk management has become an important subject in current urgently needs to study.This paper aims at the analysis of risk factors affected by rigid cash, to explore the status of risk management and risk management measures of the trust company, providing theoretical suggestions for the sustainable development of the trust company. Firstly, this paper will study the current situation of trust company development drawing forth "rigid cash" as a hidden rule, then expound background and significance of rigid cash and analyze the relation of rigid cash and the risk of trust companies. Regarding all risk factors trust companies face with, the paper analyzes the pressure of rigid cash; Secondly, the paper expounds the "rigid cash" and the "security risk management mechanism" dealing with the risk disposal in current trust companies, combined with the experience and cases of the author in the trust company, to study and explore the strategies to prevent and resolve the risk of trust companies; finally, the author points out limitations in the study and the direction we can continually make efforts hereafter.