A Trust Company Risk Management

Faced with the objective reality of macroeconomic situation shifting into the transitional period, trust companies’extensive scale growth pattern has gone forever. While various financing institutions have joined into the competitive asset management sector, innovation and transformation have become imminent for trust companies. The reform of business ideas in trust company must be adapted to the same level as its risk management ability. If there is no ability to perform outstanding risk management support, the development of trust business can only be castles in the air, lacking of stamina for business development and putting asset quality at a poor position. Therefore, strengthening the research on trust companies’ risk management issues is very important today. The establishment of risk management system must be in line with the macroeconomic environment, capital levels, risk appetite, and development strategies; this not only can guarantee business stability and satisfy the need of perceptiveness, but can also reduce policy risks, market risk, and operational risk caused by cyclical fluctuations in economic development to a certain degree. Ultimately, trust companies can successfully achieve transformative upgrade and leaping development.Through comparative analysis, quantitative and qualitative methods, inductive analysis, literature searches, and other research methods, this report comments on the theory and regime related to risk management that are formed by domestic and international experts. Considering Trust Company A’s actual situation, the report then examines its business development status and risk management issues using practical theories. Among them, the business development status analysis focuses on asset management and profitability situation of Trust Company A; through the analysis of these two aspects, the report has outlined the basic rudiment of Trust Company A’s operation development stage. For the analysis on risk management situation, the author has started with four main criterions on trust company’s risk management supervisory ratings, published by China Banking Regulatory Commission, which includes the internal control, compliance management, risk control, and risk project management. With this rating system, the author has conducted a careful analysis of Trust Company A’s risk management actuality at different levels and found out the defects within. The author has then introduced suggestions to strengthen Trust Company A’s risk management skills, including the upgrade of security risk management organization, the formation of risk management strategies, and the establishment of operational monitoring and early warning indicator system. On this basis, the author has suggested solutions that optimizes Trust Company A’s risk management system, through strengthening supervision and evaluation of risk management, speeding up the construct of information system, and promoting the risk management culture-building. Finally, at the end of the article, the author has raised the future research issues and prospects.The author hopes this article can form suggestions and measures of risk management practice to Trust Company A, and provide certain significance reference for its stable operation and sustainable development.