Research On Financial Security Early Warning System Of China In Basis Of VaR Model

Finance is at the core status of modern economy system, and the most risky industry. If the financial security can’t be ensured, the national security will be threatened. Therefore, building the financial security early warning system is of great value.Firstly, this artical analyses the research results from different angles, redefined the research contents of financial security, and compares the connection between the financial security, financial risk and financial crisis, then comments on the main warning model, illustrate the basic method of VaR model and the theoretical basis of choosing VAR model.Secondly, on the basis of VaR model, this article forms the national financial security early warning system consists of four subsystems:Monetary security subsystem; Banking and Insurance security subsystem; Debt security subsystem; Stocks and Bonds market subsystem. In observing the financial security condition, authorities can monitor the overall financial security, and solve the targeted financial security problems. In the mean time, this article analyses the factors that influencing our country’s financial security from the perspectives of both domestic and abroad. This article finds that in the process of promoting the financial globalization, the international capital flows and financial opening threaten our country’s financial security.Thirdly, this article collected the data of 23 indicators from 1995 to 2013 to do empirical analyses using constructed pointer system. The result is that the conditions of our country’s financial security are optimistic in most cases even in 2008 financial crisis. But in recent years, the conditions of foreign debt security and stock and bond security are potentially unsafe and even more unsafe.Finally, this article summarizes the main content of the paper and makes some suggestions in improve this article’s study and forming our country’s financial security warning system.