Research On Risk Management Of Securities Company

In the operation of securities companies, risk and return are two key issues need to be considered. Undertaking risks is the cost for securities companies to obtain the return. However, only the effective risk management can guarantee the appropriate return to the securities companies. Hence a securities company's capability in risk management is an important component of its core competitiveness. With the development of China's securities market, how to build an effective risk control system has been a primary matter that Chinese securities companies have to solve for their sustainable development. The category and origination of securities company's risks are various and complex. The analysis of Chinese securities companies' more than 10- year business demonstrates that policy risk, corporate governance risk, capital operation risk and operation risk have the most tremendous harmfulness and influence. Therefore it is meaningful to develop studies on these risks. With application of the relevant theories and methods in the analyses, the author classifies the risks in Chinese securities companies by the above-mentioned four kinds of risks for the first time. On the basis of in-depth and overall theoretical research and positive research, the author presents the corresponding policy recommendations and precautions against these risks.In this study, the author extensively used the theories and methods in such many kinds of disciplines as economics, management, finance, statistics, fuzzy mathematics, and so on. Because the characteristics, origination and occurrence mechanism of these four risks are different, the corresponding precautions against these risks must be varied. Therefore, the author took different research approaches. For the policy risk, the author conducted his research by the theories and methods in macroeconomics, supervision economics, theory of property right, theory of VaR and information economics. For the corporate governance risk, the author adopted theory of agency by agreement, theory of corporate governance, theory of correlated interests, theory of property right, and regression method; Pointing to the capital operation risk, the author used theory of fund allocation, theory of capital structure, theory of a, theory of investments, theory of interest rate, and regression method to carry on his research. As to the operation risk, the author mainly used the theories and methods in microeconomics, theory of enterprise management, theory of agency, AHP method, and so on.In this study, the author drew the following conclusions:1 , Through the positive study on the influence given to the risk-return in securitiesbusiness by policy affairs, the author thinks that VAR changes greatly fore and after policy affairs being launched, which means it has greatly affected the risk of our domestic securities company, policy factor is a very important one that can increase the fluctuation risk of our domestic stock market return, therefore, it is extremely urgent to track the action which regulatory body adjusts and controls the stock market.2, Giving the positive analyses on the securities company in China, seeing from the whole, the author finds out that the liability among the "three meets" of our securities company is indefinite, and the relation between the decentralization of authority and keep-balance can't play an effective role. According to the above analyses, the author thinks that the measures to consummate the corporate governance of Chinese securities company should include the following: encouraging the plurality and decentralization of shareholder structure; consummating the system arrangement of agent relation of ownership; setting up and perfecting the restriction and stimulation mechanism regarding the managing agent as the main body; setting up and consummating the mechanism of risk control and the rule of information disclosure etc.3, Comparing and analyzing the capital operation of securities company both in China and America, the author finds out that the capital circulation of the securities company in both countries has some same characteristics. But comparing with the same characteristics, there exists more differences in the capital circulation of securities business in two countries. Against the above analyses, the author puts forward several measures to broaden the financing channel of securities company and keep away the financing risk of securities company, they are, dredging the capital circulation channel between bank and capital market as the main aim; setting up the transitional and special purpose securities finance house; broaden properly the stock financing limitation to securities company; broaden properly the limitation on securities company issuing medium or long term bond; and suitably opening the inter-bank lending and borrowing market to the big securities company and so on.4, The author set up the index .system to measure risk degree according to the risk probably arising in different business of securities company, introduced AHP measure, and constructed the identification model of securities company operating risk degree and employed it into the positive analyses. The aim layer of the index system that the author sets up is the operation risk index of securities company. The rule layer includes four types such as risk of brokerage business , risk of investment banking business, risk of proprietary trading business and risk of asset management business etc. The index layer includes 19 concrete guidelines. Subsequently, the author constructed judgment matrix and confirmed the proportion of risk factors. To the decision-makers in securities company or risk management committee, firstly, they should grasp and know the key department along with its risk factor that will solicit company's operation risk; secondly, they should be cautious to those guidelines with high risks. To each department, it should know well the risk index relating to its business, and supervise strictly the main factors that solicit...