An Empirical Study On The Reputation Risk Early Warning Of China's Trust Companies

The most basic feature of trust industry is trust city,which is based on trust and requires the trust company to have a good reputation first.Keeping the bottom line that does not have systemic risk requires early identification and early-warning for risks.At present,there are not many researches on trust risk early warning,which are still at a low level.Therefore,the construction of the trust company reputation risk early warning model is of great theoretical and practical significance for the trust companies to grasp the degree of reputation risk in time,to prevent the risk of reputation and public opinion,and to achieve sustainable development.First,The reputation risk early-warning system is built on the basis of summarizing the domestic and foreign literature,information asymmetry,crisis management and stakeholders theories,the Harris-Fombrun reputation index,and combining the macroeconomic situation,the business characteristics of the trust company and the information disclosure.Secondly,The threshold is determined by the previous research and standard,in addition,consider the actual situation of the trust company.Thirdly,use the analytic hierarchy process and entropy method to determine the weigh;Fourthly,the mapping score of the index is determined by the mapping scoring method,and the risk early-warning of the trust company reputation is obtained by combining the weight and the mapping,and then use signal lamp system to display intuitively.Finally,in order to prejudge the reputation risk,taking Z trust company as an example,makes an empirical study,which selected 22 indicators in 5 years from 2012 to 2016,and forecasts the index data from 2017 to 2018 by using the two exponential smoothing method.The conclusions are as follows:first,the empirical results show that the reputation risk of Z trust company has been in the security interval for five years,and it is consistent with the annual report disclosure,showing the rationality of the model.Second,the existing reputation risk disclosure is characterized by the qualitative and ex post characteristics.The model quantify the potential factors that influence reputation and initiate reputation risk through studies the importance and the reputation risk degree of each index.Therefore,Trust companies can seize the key points and prevent them as early as possible.Among all the indicators,the scale of trust assets,the balance of new trust items,the index of consumer confidence,the ratio of active management type assets and the degree of public welfare investment have a great influence on the reputation risk of Z trust company,and the rate of GDP growth and the rate of trust are on the alert interval,which should be prevented.According to the empirical results of the trust company's reputation risk early warning,the following 5 suggestions can be put forward:to increase the degree of reputation risk,to establish an early warning model of reputation risk and to display the trend of reputation risk dynamically,to develop the trust industry,to pay attention to the consumer confidence index and to increase the investment in public welfare.