Research On The Risk Management Of Commercial Banks Under The Mode Of Financial Holding Company

With the deepening of economic integration and financial liberalization,the competition between commercial banks is becoming more and more intense.As a result,they have embarked on the road of comprehensive management through the establishment of financial holding companies,hoping to take the advantage of the funds,information,products of financial subsidiaries,and gradually build "a customer,an account,multiple products,one-stop service" integrated financial platform.However,in the process of advancing the integrated operation,the complicated ownership structure and the related transaction in the financial holding company bring about not only the synergistic effect of the large-scale operation but also the more complicated and diversified risks,which poses a huge challenge on risk management systems and external regulation of the financial institution,especially commercial banks as subsidiaries in risk management are often in passive positions.Therefore,it is very important to study the risk management of commercial banks under the mode of financial holding company.This paper analyzes the main risks faced by bank subsidiaries after the establishment of financial holding companies: First,the same funds re-use between different financial subsidiaries has brought the risk of capital recosting and the ability of bank subsidiaries to resist risks;second,the nature of the financial subsidiaries business is somewhat converging,inevitably there is conflict about interests between a bank subsidiary and other financial subsidiaries;third,there are some difference between the requirements,purpose and instruments of the risk management,so the risk management culture of the financial subsidiaries is not always consistent with the problem;in addition,under the not perfect financial holding company risk management,equity investment and related transactions with funds,products and information also provide a convenient way to spread the risk and increase the probability of the risk of infection to the bank subsidiaries.In view of the above risks,China’s financial holding companies have taken some risk prevention measures,but there is still a big gap compared with American mature risk management system.China still can not effectively control the risk.This paper expounds the present situation and shortcomings of the risk management of commercial banks under the mode of corporate governance,internal management system,risk management culture and external supervision system.On the basis of the experience of American risk management,several recommendations are as follows: first,to optimize the shareholding structure of the Group level,improve the Group’s governance,and give reasonable guidance recommendations by introducing strategic investors and outside investors,to risk management and banking subsidiaries;second,to coordinate the relationship between parent companies and subsidiaries and build differentiated subsidiary risk control models and adopt risk management techniques combined with quantitative and qualitative analysis to establish risk warning mechanism and improve comprehensive risk management system;third,to foster corporate culture focused on risk isolation;in addition,to speed up relevant legislation on financial holding companies,optimize the regulatory structure,establish priority protection system with bank subsidiaries as its core,and explore diversified withdraw mechanism of financial subsidiaries,reduce the occurrence of a single subsidiary operational difficulties caused by the risk transferring crisis.Only by those ways can guarantee the stable operation of the bank subsidiaries comprehensively.