Research On Risk Management Of Local Financial Holding Companies

Since the 21st century,under the impact of the wave of global financial mixed operation,China has gradually relaxed the strict separate operation mode,taking the financial holding company mode as the main breakthrough,and moved towards the exploration of financial mixed operation.In order to integrate local financial resources and boost local economic development,local governments have established local financial holding companies,and local financial holding companies have sprung up in China.However,mixed operation will not only bring more optimized resource allocation efficiency and stronger economic benefits,but also bring greater financial risks.The occurrence of economic crises such as the great depression and the financial tsunami is inextricably linked with mixed operation.As the parent company of various financial business entities,financial holding companies have the characteristics of cross industry,full license and large scale.They are the re emergence of mixed operation after decades of restraint and forbearance in the world economy and society.The research on its risk management has great practical significance.Local financial holding companies,especially those in economically underdeveloped areas,have problems such as imperfect internal governance mechanism and lack of firewall,which makes the hidden dangers of risk communication accumulate continuously.Moreover,external supervision lacks mixed supervision experience,still stays at the level of separate supervision,and has not yet formed a comprehensive and multi-level supervision system,which makes regulatory arbitrage an opportunity.This thesis expounds the definition and classification of financial holding companies,the evolution process of financial holding companies at home and abroad,introduces the current situation of local financial holding companies,and describes the theoretical risk of local financial holding companies in detail.The specific risk representations of local financial holding companies include principal-agent risk,capital double counting risk,interest conflict risk,information disclosure risk,related party transaction risk and regulatory arbitrage risk.In terms of supervision,by expounding the "umbrella" supervision mode of the United States,the "double peak" supervision mode of the United Kingdom and the "unitary" supervision mode of Japan,this thesis analyzes the same strategies and priorities under different supervision modes of developed countries,which highlight the core role of the central bank in financial supervision Pay attention to the protection of the legitimate rights and interests of investors and the supervision of capital adequacy and liquidity.This thesis introduces Jiangxi Financial Holding as a specific case,deeply analyzes the external regional environment,company development status,financial business layout,internal business indicators and other information of Jiangxi Financial Holding,and makes a comprehensive analysis of Jiangxi Financial Holding.The financial businesses of Jiangxi Financial Holding Group include guarantee business,re guarantee business,financial asset management,futures brokerage business,etc.The risk prevention feature of Jiangxi Financial Holding is that the financial subsidiary and the group parent company perform their respective duties.The financial subsidiary is responsible for the vertical prevention of specific financial business risks,and the group parent company is responsible for the horizontal prevention of cross risks of each financial subsidiary.The two prevention methods are organically combined.This risk prevention method gives each financial subsidiary greater power and responsibility,which can enable each subsidiary to give full play to the advantages and characteristics of the industry and establish a more efficient risk management scheme.However,under the condition of high decentralization,the risk management of the whole group is difficult to form a system,there is a certain principal-agent risk,which affects the effect of internal supervision of the enterprise.Through the theoretical research and case analysis of local financial holding companies,the improvement suggestions of risk management mainly focus on improving the internal governance level of enterprises and improving the external supervision system.In terms of improving the level of internal governance,first of all,we need to improve the overall risk control level of enterprises,follow China’s legislative procedures,establish a group level risk management system from top to bottom,and enable a fully functional risk management ERP system;Secondly,we need to improve the construction of human resources system,improve the professional quality of employees and enterprise management level,and avoid the principal-agent risk;Thirdly,enterprises need to strengthen information disclosure from three aspects: the content of information disclosure,the direction of information disclosure and giving play to the role of third-party institutions;Finally,we need to establish a strict financial,personnel and information firewall system among the financial subsidiaries within the local financial holding company.In terms of improving the external supervision system,we should first improve the relevant legal system so that all supervision departments have laws to follow;The second is to establish a regulatory framework of "umbrella + double peaks".When the central bank takes the overall situation as the "umbrella tip",set up the "double peaks" of financial behavior supervision and financial prudential supervision,and realize a comprehensive regulatory framework together with other regulatory institutions;Thirdly,establish the concept of functional supervision,establish a cross sectoral and cross industry supervision cooperation mechanism,and take information sharing,negotiation on major issues,law enforcement assistance,prevention and resolution of risks as the work objectives to improve supervision efficiency and expand supervision coverage.