The Research On Market Risk Early-Warning Of Securities Company

Securities is an industry of high risk. Market risk is the biggest risk of securities company. With the intensity of fluctuations on price in foreign exchange and money market, market risk has become increasingly prominent. How to control the market risk of securities company effectively has become the most important issue to the sustained and healthy development of securities company. In this context, the paper concentrates on the study of market risk early-warning which is an important part of market risk management.On the basis of the theories of financial risk management and the early-warning, this paper analyzes the reasons of market risks and the influences on three major businesses, such as brokerage business, underwriting business and primary business, Compared with the securities companies of the United States, Canada and Japan, the paper discusses the problems of market risk early-warning of securities company in China. These problems include: lack of awareness of early-warning, incomplete organization and laggard early-warning technology. Furthermore, we sum up the enlightenments on external monitoring of early-warning, constructing organization and early-warning technology. Combining with the status quo of market risk early-warning, the paper establishes the corresponding index system by choosing fifteen indexes which cover three major businesses on brokerage business, underwriting business and primary business, adopting the logistic analysis method which connects with the factor analysis method to establish early-warning model and do empirical study. Finally, on the basis of market risk index system and early-warning model, we build the market risk early-warning system. To solve the problems, the securities company should improve the construction of organization, prefect the mechanism of internal control, improve the technology of early-warning and strengthen the training of qualified personnel.