By Chen Daofu　

Date: 2003/12/11

Abstract:

The financial groups risks originate from external and internal risks characterized by risk infection and risk spillover. However, the inconsistency between risk undertaking and risk returns is the key to bring about crisis. At present, there are loopholes in the laws for and supervision over inter-trade investment. The macro and micro risk factors facing China's financial groups are issues related to the reform of split-off management, interest rate control, monopoly, interest transmitting and risk management and control. It is necessary to perfect relevant laws and regulations, enforce principle supervision system and connect coordination mechanism and establish complete supervision system over financial groups who should be encouraged to raise the level of risk management through internal control.