Research On Financial Risk Of Financial Holding Company

With the development of the investment financial business of China’s enterprise groups and the in-depth promotion of the comprehensive operation of financial business since the reform and opening up,financial holding companies have set off a wave of reform in China’s financial market and gradually formed a number of substantive financial holding companies and financial groups with more Chinese characteristics.However,due to the fact that the research on financial holding companies in domestic academic and practical circles is still at the exploratory stage,and the lack of supporting laws and regulations to regulate them,financial holding companies have high financial risks in the process of development,so it is urgent to identify and evaluate their financial risks.At present,there are few empirical and case studies on financial risks of financial holding companies at the micro level in China.Therefore,the paper starts from the micro level and discusses relevant cases.First of all,this paper reviews the relevant literature,and analyzes the key influencing factors of financial risks of financial holding companies from the perspectives of external risks and their own risks.Secondly,based on the identified key influencing factors of financial risk,the entropy method is used to establish a comprehensive evaluation system for financial risk of financial holding companies.Finally,taking E Financial Holding as a case,the comprehensive evaluation system of financial risk of financial holding companies constructed is applied,and a series of risk prevention and control strategies are proposed according to the results.Through the above research,the paper draws the following conclusions.First,financial risks of financial holding companies are not only faced with external risks such as legal supervision and macroeconomic environment,but also faced with internal risks such as income distribution risk,related party transaction risk,financing risk,capital recovery risk and investment risk.Second,the established financial risk comprehensive evaluation system was used to conduct an empirical study on the financial risk status of E Financial Holding.The results showed that the financial risk of E Financial Holding experienced a process from deteriorating to recovering in the six years from 2016 to 2021.In addition to investment risk,capital recovery risk and related party transaction risk,the general trend of financing risk The trend of income distribution risk is decreasing.Thirdly,the paper proposes a series of financial risk prevention and control strategies from the perspective of internal operation,including four measures: improving the awareness of financial risk prevention and control,improving the financial risk prevention and control system,strengthening the communication of financial risk information,and giving full play to the financial supervision function.