On The Modernization Of China's Financial Risk Management Techniques

Ever since China's reform and opening up, the financial agencies possessing relative industrial monopoly have been developing rapidly in the light of the tremendous growth of China's national economy. Under the general tendency of economic globalization and financial liberalization, how to manage the financial risk which is more complicated with each passing day becomes the first thing of China's financial regulatory departments and financial agencies. Combining with China's national conditions, on the basis of introducing western modern financial risk management technology, this article studied and analyzed the necessity and feasibility of implementing modern risk management technology to manage financial risk. Furthermore it put forward some suggestion on realizing the modernization of financial risk management technology for policy consideration. The article is divided into three chapters.The first chapter introduced the developing status of China and western developed countries in the field of financial risk management technology and the gap between them. The definitions of financial risk and financial risk management technology were briefly introduced first and on the basis of that, the main theory, models and technology of modern financial risk management were tersely explained. In addition, the chapter set forth the importance of financial risk management technology from the aspect of financial safety and pointed out the specific meaning and requirements of financial risk management modernization.Later on the first chapter introduced the emerging basis, developing status and characteristics of western modern financial risk management technology. On the basis of mature market-oriented economy and financial system, through dozens of years' development western modern financial risk management technology has possessed a compact risk management mechanism that is routinized, organized and systemized as well as colorful risk management tools regarding as technique and products.Additionally, supported by modern IT, western modern financial risk management technology has established a complete, scientific and quantization modern financial risk management system, say putting priority to the management of credit risk and market risk and take consideration to other risks. And then this chapter analyzed the backward status of China's financial risk management technology and its reasons. The present status is qualitative macro-management plays a dominant role in China's financial risk management, quantized technical measures, however, are hardly used; generally speaking, China's financial risk management is still in the embryo stage. The reasons are risk-shouldering bodies are not clear; financial regulatory trends to be conservative; inner-control mechanism still needs improving and risk management talents are deficient etc.The second chapter analyzed the necessity and feasibility of realizing financial risk management modernization in China. First of all, the chapter set forth the significance of financial risk management technology modernization to China. Accompanying the remarkable growth of national wealth, China has also accumulated a great deal of financial risk after more than 20 years' rapid and sustained economic development since reform and opening up. The above-mentioned financial risk has the features of systemization and latency. Once economy stagnates or overgrows, macro-system is greatly changed or attacked by outside world, latent risk will possibly turn to systemized financial crises in reality and seriously devastate national economy. The traditional risk management measures cannot adapt to the more and more complicated risk environment, so only modernized risk management technology can be on guard against and solve the crises better. As a result, it is urgent for China to realize financial risk management technology modernization.It is necessary and feasible to realize financial risk management technology modernization in China. Firstly, financial regulatory authority t...