Risk Management Of Chinese Financial Holding Company

With the development of economic and financial globalization, a new form oforganization-financial holding company comes into existence, which is also animportant way for financial organizations to increase their competitive abilities. However, financial holding company is a sword with two sides. It will exert its advantages such as "economies of scope" and "economies of scale" if it develops well, otherwise, it will cause new and huge risks even to affect the whole nation's safety. There are kinds of financial holding companies (to be) in our country, the academic circle has made sure that financial holding company will be the main model for China to realize mixed operation. "The Eleventh Five-year Plan" of China also put forward the idea of gradually making experiments on mixed operation in financial industry, which signifies the coming wave of forming Chinese financial holding companies. However, Chinese financial holding companies may meet with certain risks during the developing process because of internal risk management system building at an early stage as well as external factors lagging behind such as the relative laws and inspection system. With reference to successful risk management experience from foreign financial holding compani(?)s combined with the current developing status of Chinese financial holding companies, to build a Chinese-featured risk management system will be helpful for Chinese financial industry to develop more stably.This paper first explains the relative theories of financial holding company and risk management. Secondly, it concludes the successful risk management experience of foreign financial holding companies. Then it analyzes the current risk management status and problems of Chinese financial holding companies, which starts with introducing the current developing status of Chinese financial holding companies. The paper comes up with solutions and suggestions to perfect risk management of Chinese financial holding companies to ensure their lasting and healthy development, which involves building internal risk management system, perfecting corporate governance as well as strengthening internal and external control system. Based on "Enterprise-wide Risk Management Framework" (ERM), the paper discusses risk management from both micro and macro sides.