On Financial Risk Management Of Private Financial Holding Company

Through the establishment of financial holding companies engaged in diversification,many domestic financial enterprises have embarked on the road of comprehensive operation,which is conducive to achieve synergies and enhance the competitiveness of enterprises.However,the establishment of a comprehensive financial group also increases the difficulty of management,resulting in various financial risks,such as liquidity risks,business integration risks,policy and regulatory risks brought by policy changes of financial holding companies,and internal transaction risks,etc.In recent years,many private enterprises have begun to build an integrated,full-license financial holding platforms.However,unlike state-owned financial holding companies,which have always been strict in supervision and relatively standardized in operation,private enterprises often neglect internal governance and risk control in the absence of long-term external supervision,thus the ability to withstand risks is low: on the one hand,as a financial holding company,it faces the debt repayment risks and liquidity risks brought by debt expansion,risk transmission caused by disorderly internal transactions,poor financial synergy effect caused by business integration;on the other hand,because of the complexity of equity relations,private financial holding companies have become the focus of external supervision.The tightening trend of relevant policies has made a stronger impact on the financing capacity of private enterprises.The relatively scarce risk isolation mechanism of private financial holding companies also makes the level of internal transaction risk higher.In order to predict the risks earlier and prevent the risks from further expanding into systematic financial risks,it is particularly important to manage the financial risks of private financial holding companies.This paper mainly uses case study method to analyze the financial risks and their management of Jiuding Group,a listed private financial holding group.First of all,it realizes the main characteristics of private financial holding company,by comparing them with general financial enterprises and state-owned financial holding platform,to analyze their commonness and individuality in financial risks.Secondly,in view of the specific case of Jiuding Group,this paper identifies the financial risks of Jiuding Group from liquidity risk,business integration risk,policy and regulation risk,and internal transaction risk,and analyses the changes of relevant financial data caused by various risks.Then,combined with the diversified financial business management practices and changes in financial policies of Jiuding Group,this paper analyzes the reasons behind the various risk performances,and thinks about how to predict risks and avoid the adverse effects of risks.Through case studies,this paper puts forward the following suggestions for the above four aspects of financial risks of Jiuding Group.Firstly,by increasing the proportion of short-term financial assets appropriately,improving the liquidity of assets,and establishing a group financial index system with capital security as the core to fully prevent liquidity risks.Secondly,to achieve better financial synergies through further business integration,including the further combing of complex business lines,the standardized management of new business expansion,and the use of electronic information systems at the group level to improve the business cooperation and reduce business integration risks.The third is that Jiuding Group should conform to the regulatory trend of the financial industry,fully study the prudential supervision methods of financial holding companies and the impact of other financial policy changes on the group,then formulate appropriate financing and operating strategies.Fourthly,we should start with perfecting the risk isolation mechanism and standardize the internal related transaction in order to prevent the internal transaction risks.There are three innovations of this paper.Firstly,taking the private financial holding company as the research object is almost not involved in the previous research,in practice,such enterprises are few.Secondly,the case study on financial risk management of financial holding companies is supplemented.Thirdly,this paper has fully considered the impact of the new policy changes of financial holding companies at the present stage.Currently,it is in the early stage of formulating relevant policies and regulations,so this point is rarely involved in the previous literature.