A Study On Risks Control Of The Cross-financial Businesses In China

In the background of deepening financial reform in China, banks, security companies, insurance companies and other financial institutions have started to joint bilaterally or multilaterally, and launched a variety of complementary advantages and innovative cooperation, and developed a batch of the financial businesses with the cross profession characteristics in common to seek for greater development. The cross-financial businesses involve a variety of financial tools, and reflect the complex relationships between rights and obligations of institutions and investors, and contain the cross-organization risks, the cross-market risks and the inter-state risks. At present, investors still lack comprehensive understanding to the cross-financial businesses. The financial institutions have not yet established an effective internal risk control mechanism to the cross-financial businesses. Regulatory vacuum still exists on parts of the businesses, and regulatory systems have to be improved. The development of the cross-financial businesses since will prepare for the future financing mixed operation, and will also exist even in financing mixed operation. Therefore it is necessary to study the risks which these cross-financial businesses produces, and how to measure and control the risks.This paper is divided into five parts altogether. The first part is introduction, mainly is to discuss the writing background, the present situation of domestic and foreign research, the research methods and the main structures of this paper.The second part is outlines of the cross-financial businesses, which discuss the cross-financial businesses in a comprehensively analysis to the concept, the processes of evolution, the motivations of development and the types of the cross-financial business.The third part mainly discussed influence of the cross-financial business in the financial industry, and analyzed characteristics of the cross-financial businesses' risks from system risks and non-system risks.The fourth part is the key part of the paper—how to measure and control risks of the cross-financial businesses. Stock-based pledge loan is a typical representative of the cross-financial businesses, so the paper uses stock-based pledge loans as the example. According the roles of stocks in the pledge loan, the paper employs VaR methods to measure and decompose the risk of the stocks, then uses market information of stocks to calculate the ratio of stock-based pledge loans. The empirical analysis in the paper proved the VaR method having the unique superiorities in measuring and controlling of...