Financial companies (also known as financial companies) are extremely important financial institutions in western countries.
Its financing mainly depends on issuing commercial paper in the money market and issuing stocks and bonds in the capital market; They also borrowed money from banks, but the proportion was very small.
The collected funds are used to provide loans to consumers and small businesses who buy durable consumer goods and repair houses. Financial companies are divided into three categories: sales finance companies, consumer finance companies and industrial and commercial finance companies.
Some financial companies are formed by parent companies to help promote their products. For example, Ford Motor Credit Company, established by Ford Motor Company, provides consumer credit to consumers who buy Ford cars.
Recognition principle
Conform to classification rules
Classification rules are the basic rules that must be observed in any classification process, and also the standard to test whether the classification is correct. Therefore, the risk classification system of financial companies must first meet the classification rules. There are four main classification rules: I completeness. In the scientific sense, the sum of the divided species should be equal to the extension of the generic concept. M =π+P2+ VIII +Pn. In fact, every possible risk event can be classified as a risk category. The completeness of risk division system is the basis of enterprise's comprehensive risk management. Second, independence. Scientifically speaking, the sub-items according to the division are incompatible with each other and have completely different relationships. In practice, every possible risk event belongs to only one risk type. Uniqueness of standard iii. There is only one classification standard for each level. Iv logic level is clear. The logical level ensures the rigor and intuition of classification. Risks that are not at the same level cannot be listed side by side for discussion.
Clear definition
In a scientific sense, the definition term is generally attribute plus species difference, and a clear definition is the basis for forming a category system. Therefore, the definitions of various risks must be clear and easy for all employees to understand, and ensure that there will be no mistakes in the recording, statistics, monitoring and reporting of risk events.
Easy to measure risk
In order to accurately warn the comprehensive risks of financial companies, it is necessary to accurately measure all kinds of risks, so as to calculate the capital demand covering risks and the cost-effectiveness of risk transfer. Therefore, the risk division system must create favorable conditions for risk measurement.
Easy to supervise and control risks.
The purpose of measurement is to provide basis for risk early warning decision-making and control. Although dividing risks according to their mathematical characteristics may meet the measurement requirements, the measurement results may not help enterprises to take risk control measures. Therefore, the risk classification system of financial companies must also take into account the requirements of risk supervision on the basis of measurement, so as to take risk control and transfer measures according to the risk situation, so as to obtain the maximum economic benefits from the measurement results.
Compatible with the risk division system of mainstream financial industry.
In order to adapt to the development trend of diversification, mixed operation and comprehensive risk management in the international financial industry, various financial companies should establish a modern risk division system that meets mainstream standards.