The Analysis On Financial Risk And Control In NY Company

In recent years, China's economy has transformed from a rapid growth into a relatively moderate growth. The slowdown in economic growth and the increase in the number of commercial banks have made the competition among commercial banks more intense. The macro-economic environment does not only requires banks to improve their business strategy in order to maintain market share, but also requires banks to establish sound financial risk management system in order to prevent financial risks and enhance bank's ability to manage any financial risk. NY company is a branch of one of China's major commercial banks. Since it is located in the second-tier cities, its ability to control financial risk is relatively weak. It lacks of scientific risk management decision-making process, which made the bank susceptible to a series of potential financial risk during its operation and management process. With the marketization of interest rate, NY company is facing greater challenges as the bank lacks of experience in interest risk management. As a result, NY company should strengthen its ability in managing financial risk in order to meet its operational needs.This thesis analyzes the financial risk management process in the NY company based on a framework comprised of the theory and methodology in financial risk and expert interviews. First of all, from the theory and current situation of financial risk management, we introduced the world's most current researches on financial risk management. Then, we analyzed NY company's financial performance from five perspectives-credit risk, liquidity risk, profitability risk, capital risk, and interest rate risk. As a result, we concluded five findings-poor credit risk control, low liquidity monitoring efficiency, weak profitability, unbalanced debt structure, and missing interest rate risk monitoring process-in NY company, and we analyzed the macro and micro reasons behind each finding. Lastly, we recommended five measures to help NY company effectively enhance its financial risk management process-control the amount of bad assets, optimize the structure of credit assets, promote the development of intermediary business, actively develop high-quality financial resources, and strengthen the bank's ability and autonomy in interest rate pricing.