Major Methods for China’s Financial Risk Management

Dr. Huang Haifeng and Ma Hongyi

China ’s Research Center for Economic Transition,

The main problems of China’s financial risk management are asymmetric information and deficient supervision. While the international financial risks were exacerbating, the potential crisis was expansion. Most Chinese financial institutions were isolated to operate for a long time. When confronting the new challenge, they should learn from advanced international financial rules and standards, like risk avoidance and financial supervision mechanisms of the New Basel Accord. In the meantime, they should change conventional behaviors, apply necessary methods to improve their management, and gradually form a national-featured financial risk management system.