Risk Early-warning System Of China’s Futures Companies Based On Logistic Regression Model

As one of the most important financial derivatives,futures plays an important role in the whole financial market and even in the national economy.After 30 years of rapid development and expansion,China’s futures market has begun to take shape,and its impact on other financial markets and the national economy has become increasingly prominent.However,we must notice that while the rapid expansion of the futures market,the development of the futures industry is backward.The homogeneity competition in the industry is serious,the regulation of the futures industry and the internal supervision system of the company are still not complete.These problems have seriously affected the healthy and stable development of China’s futures market.The cause of these problems lies in the fact that futures companies have a perception of their own risk level and the ability to manage risks.Based on the existing risk assessment and monitoring system of the futures industry,this paper analyses the respective strengths and weaknesses of the existing two risk management systems.And propose a risk early warning system using logistic regression to combine the advantages of the existing two types of regulatory systems,and it will applicable to China’s futures industry based on a two-step judgment method.The risk early warning system of the futures companies constructed in this paper can effectively distinguish the risk management capabilities and risk level of different futures companies through a two-step approach and send early warning signals to companies with poor risk management capabilities and high risk-level.In this way,the real-time dynamic monitoring and early warning of corporate risk management capabilities and risk levels in China’s futures industry will be implemented to prevent risk proliferation and avoid crisis.In the first step of risk early warning system constructed in this paper,the accuracy rate of the companies with poor risk management abilities and high risk-level reached 86.56%,and in the overall,the accuracy rate of the system for the three types reached 79.04%.The overall level is high.In addition,from the significance of regression results and coefficients,we find that the net capital size and return on net assets of futures companies have stronger influence on their risk management capabilities and risk levels.Therefore,China’s futures companies must pay special attention to these two indicators in the operation and conducting business process.