The Risk Management System Research On Government Financing Platform Company

The financing platform is the product of the high demand of funds forinfrastructure constructions, as well as the lack of government income. Each rapiddevelopment of the local government’s financing platform is originated from the largenumber of the local infrastructure constructions. Our country is in the rapiddevelopment of urbanization, the local governments are now facing the task ofbuilding a huge amount of security housing, when the financing channels in stockmarket as well as the bond market are not working well, the financing platform willcontinue to exist. However, some local governments’ financing platforms remain acertain risk, due to the establishment and operation system is not standard,decision-making and management mechanism is not unified, governance structuredoes not run well, operating conditions are not good, plus/or the lack of effectivenessin constraint mechanism, etc.In recent years, the local government’s financing platform companies raise fundsthrough debt financing for their local economic and social developments. They alsoplay a positive role in enhancing the infrastructure construction and dealing with theinternational financial crisis. But at the same time, some problems also appeared, towhich we need to pay special attention. They are mainly about that the financingplatform’s debt grows too fast, but the operational procedures are not standard. Thelocal governments provide guarantee illegally or in disguised form, so the risk forpaying the debt increases; also some banks’ risk awareness is weak, and they are lackof managing the financing platforms’ credits.This paper researches and analyzes the present situation of company A to find thecore reasons. According to the comprehensive risk management theory, I build anoverall risk management system for company A, so as to set an example for othergovernment financing platforms in the same type. More importantly, it is to provideoptimization suggestions on risk management for governmental financing platforms.First of all, this paper constructs a comprehensive risk management system forthe governmental financing platform. It constructs the framework of the riskmanagement system; it also discusses the relationship between the comprehensive riskmanagement and enterprise internal control. This paper analyzes the characteristic ofthe governmental financing platform company’s risk management system. Secondly, itidentifies and analyzes the risk, from the four aspects of financial risk, operationalrisk, managerial risk and political risk to refine risk factors. Then we can find out thereason is that the governmental support is big, however the self-improvement poweris not strong, as well as the company is lack of risk awareness and the risk controlmechanism. Finally, set up the policy that the top leaders must fully understand andagree with the comprehensive risk management, strengthen the leadership to improverisk management knowledge and risk management system implementation strategy.