Research On Compliance Risk Management Of China’s Rural Fianncial Institutions

In recent years, China’s banking financial institutions’ illegal cases occur frequently. There are many reasons for the frequent illegal operations and irregular operations of the banking financial institutions, while lack of the bank’s internal compliance risk management system is one of the most fundamental and the most important reason. In this case, in October2006, the China Banking Regulatory Commission issued "Guidelines for the Compliance Risk Management of Commercial Banks"."Guidelines for the Compliance Risk Management of Commercial Banks" put forward specific requirements for commercial Banks from the compliance culture, effective compliance management system and strict compliance management system, expecting to achieve good management of China’s banking industry compliance risk. China’s banking financial institutions include policy banks, large commercial banks, small and medium-sized commercial banks, rural financial institutions, as well as the Postal Savings Bank of China and foreign banks. Looking at our articles on bank compliance risk management, most articles are based on China’s state-owned commercial banks and joint-stock banks, rural financial institutions in China as the theme of the article is very few. According to existing research, we found that rural finance has an important role in promoting the development of the rural economy. China, as a big agricultural country, the development of the agricultural economy is more related to the development of the national economy, fundamentally related to China’s socio-economic and social development. Rural financial institutions as the carrier of rural finance development, plays a prominent role in the development of the rural economy; rural financial institutions’ compliance risk management is an important part of the risk management of financial institutions in rural areas. Under these conditions, we think we should strengthen research on compliance risk management of rural financial institutions. China’s rural financial institutions mainly include:rural credit cooperatives, rural commercial banks and rural cooperative banks. In contrast, the role of rural credit cooperatives in rural economic development is much larger than the role played by the rural commercial banks and rural cooperative banks, so studying compliance risk management of rural credit cooperatives is more practical significance. Therefore, we mainly selected rural credit cooperatives as the main financial institutions of rural areas compliance risk management research in this paper.For historical and institutional reasons, on the one hand, China’s rural credit cooperatives is a large organization and personnel jumbled; the other hand, Its operating level is relatively poor, management capability relatively weak, relatively low Staff. Compared to the state-owned and joint-stock commercial banks, the development of the compliance risk management of rural credit cooperatives is lagging behind, compliance risk awareness is lacking, culture of compliance is not strong binding, and compliance risk management organization system is imperfect. In this paper, we start from the definition of compliance and compliance risks and the development status quo of China’s rural credit cooperatives, as an example of rural credit cooperatives in Zhejiang, cited the typical illegal case of rural credit cooperatives in Zhejiang Province in compliance risk management in the past few years, to get to the bottom of the reason. And we put forward a number of policy responses to address these issues, and indicate the direction of development. This study expect to be able to have a practical significance to the improvement of the rural credit cooperatives compliance risk management.