The Risk Management Of Finance Leasing Companies

Since the introduction of financial leasing considered as an innovative form in the 1980 s,the financial leasing industry has made positive contributions to the drawing of the advanced equipment and technology,promotion of industrial upgrading,revitalization of enterprise's funds and so on.In recent years,China's financial leasing industry has a booming development while industry risks hiding in that should not be overlooked.Compared with the developed countries,China's financial leasing industry is still in its beginning state.For the risk control system construction and improvement of the transaction structure,there is still a lot of hard endeavor to extend.In order to follow the development trend of the finance leasing industry,this paper takes the risk management of the finance leasing enterprise as the breakthrough point.Introduce industry-representative example of company.The main perspectives of this paper are as follows:Firstly,this paper combines the industry background and study significance of financial leasing to make an introduction of current situation according to domestic and external circumstance in addition to making a presentation of four aspects which were respectively industry scale,leasing contract balance,financial leasing penetration and industry risk.With these ways the paper makes a detailed demonstration to the financial leasing industry in our country overall.Secondly,it analyzes the mechanism of the risk of the finance leasing company and evaluates the risk types that the finance leasing company may fall across.Finance Leasing Company will not only confronts the external risk such as credit risk,market risk,and policy risk but also the internal risk such as operation risk,liquidity risk and leasing objects risk.Then,it evaluates the risk of financial leasing company and make a research to risk management example by leading into an example of case company through illustrating the specific measures to reply the credit risk management,market risk management,and liquidity risk management in W Finance Leasing Company.Considering the company financial benefit,debt risk and growth ability,the traditional financial indicators analysis was applied to evaluate the risk level of W Finance Leasing Company and propose the defect of traditional financial index measuring the risk level of financial leasing company hence refering to the US "unified financial institution rating system" ——CAMELS risk evaluation system.Combined with industry characteristics and risk level,the six items including China's W Finance Leasing Companies' Capital Adequacy,Asset Quality,Management Capability,Earnings Quantity and Quality,Liquidity and Sensitivity are measured and analyzed in detail.The validity of the model is verified by the empirical analysis of the case and the whole industry level.And the author refers to the potential problems and management defects based on the risk level of W Finance Leasing Company.Finally the author proposes the suggestions on risk management and prevention of finance leasing companies in China from both macro and micro perspectives.