The Analysis Of Financial Risk Based On Statistical Simulation Technology

Due to financial globalization, with innovative of its own development lead to today’s financial institutions, business activities face with more risk in the market. Triggered by the U.S. Real crisis from estate sub-prime together with butterfly effect, causes financial crisis spread the whole world, and global economic downturn is dramatically worrisome. However, financial market has always been choppy. Throughout history, we know that finance development and risks coexist. Regulation of the financial sector is also from unchecked to preliminary management, to strict management, finally develop into freely grow-up process. It is undeniable that the liberalization of monetary markets speed up the development of the financial industry. However if monetary markets are overly allowed to be left to themselves in the absence of strict regulation of the financial sector, for sure it will increase their risk. Therefore, the regulatory innovation is especially important. Financial risk increased a lot of uncertainty to the financial regulatory, this needs us to strengthen financial regulation. As China’s monetary markets continue to improve and also speed up the foreign development, so for China’s monetary markets, financial institutions, there is great potential opportunities, and there are also some risks. To solidify and promote the development of China’s financial industry, top priority is to improve risk control and risk management of our country’s financial markets.Risk measurement is the key to Risk and Compliance, risk management.With the development of China’s financial industry going ahead very fast, accurate measurement of financial market risk is the primary problem in front of us.International financial risk measurement standard VaR risk measurement model as a very important risk measurement tools are widely used and promoted in the world’s financial institutions. At the same time, the resulting statistical simulation technology, and fast development, it simulates the financial system in real life, realizes complex financial system modeling implementation. Therefore, no doubt that especially the MC method applying the statistical simulation technology to the analysis of the VaR is an excellent innovation method.This main idea of the paper is:firstly presenting background of the research and importance of the article, and current status of research domestic and overseas, also the main content of this article. Secondly, the monetary market risk and its measurement of VaR method are summarized. Finally, this paper describes statistical simulation method, and case analysis.