Analysis and Control of Financial Holding Companies' Risk of Comprehensive Management

Financial crises in 2008 have aroused academic circles' interest in comprehensive business risk of financial groups. China's policy at present formulates that China carries out divided operation and business segregation in financial circles, however, at the entity level various forms of financial holding companies have appeared. Within the framework of the current policy of divided operation in China, financial holding company does not break the principle of divided operation, but also achieves the practical effect of comprehensive management and minimizes influences and impacts on the current legal environment as well as supervision systems; therefore, it is a realistic choice for achieving comprehensive management. Due to its diversification in business, financial holding company faces the risks of related transaction, conflict of interest, double accounting of capital, transparency, systems, morality and so on. For the control measures of risk of financial holding companies, first, establish a "firewall" system; second, strength the monitoring of capital adequacy; third, enforce information disclosure. The paper points out particularly in the process of risk control we should adhere to a basic principle, that is, to be strict moderately. On account of the lack of supervision legislation on the financial holding companies in China currently and the high risk, ensuring the safety and soundness of financial holding companies is the primary goal of risk control system design, therefore, we should not be excessive pursuit of resource integration and synergistic effects between different agencies and should intensify the efforts on the degree of integration between financial institutions.