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The Performance Investigation and Risk Management of the Banking Industry in China

On 04/10/2014, in Finance, by rain

Nowadays,the bank is the core of the financial community in the world, theoperation of a country’s Economic is closely related with the bank’s development. Atpresent, the state-owned commercial banks have restructured already, foreign bankscontinue to emerge, in this case, the bank’s performance have become the issue thatthe financial industry most care about.So improving the bank’s performance is thekey to maintain stable Economic development,also the key to improve the bankingmarket competition.Based on this, this paper discusses the influence factors of the commercialbanks’performance in China.First review the international research’s literature onbank performance, then discuss the measuring indicators and methods of bankperformance. And on this basis,the impact factor of bank performance are studiedbased on the theory and evidence: profitability, Management ability, the developmentof capacity and safety. Then this paper determines which factors play a key role inbank performance,thus proposes on how to improve the performance of commercialbanks in China.In addition, on the basis of the research of the bank performance, this paperassess the banks’ risk by introducting the VaR model. As a kind of the quantitativeanalysis tool, VaR model is, in recent years, widely used as a financial riskmeasurement technology in the international financial domain. That it’s a quantitativeanalysis method,makes risk Management objective and scientific. This paper mainlyby combining the performance and VaR model, assess a bank whether there is anyrisk in China, and put forward the VaR model in China’s banking industry in the useof risk Management.The conclusion of this paper is that the bank performance is influenced byprofitability, management ability, the development of capacity and safety. Profitabilityis the most important factor.Management ability is the second one.Next is thedevelopment of capacity.The last one is safety. With the help of the VaR model, theauthor find that the16banks’ performances are good and the market performance isalso good. The risks of these banks are at a low level, the degree of risk managementmay be appropriately lower.

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Calculation of Pledge Ratio in Commercial Banks Based on VaR Method

On 04/10/2014, in Finance, by rain

The NPA (non-performing asset) in China’s banking industry has beenaccumulating from1990s while the booming growth of economy. The whole industryis under the burden of rising NPL (non-performing loan) ratio. In addition, with theto be improved internal credit rating system in China, it is quite difficult to measurecredit risks. As a result, commercial banks in China tend to avoid unsecured creditload and also start to favor carrying out mortgage loan business. Stocks and realestates hold a large proportion in the pledged assets of China’s commercial banks. It isan important task for whole China’s commercial bank industry to identify and preventrisks in stocks and real estates pledged loans by analyzing pledge rates of these assets.The author reviews the research background and significance of credit risk. Thisarticle summarizes the implication of stocks and real estates pledged loan, VaR,EGARCH model, etc. The method of analyzing pledge ratio using VaR is alsoelaborated in this article. An empirical research has been carried out based on finaldaily close prices of54representational stocks and monthly prices of real estates in8different areas. For stock prices with normal distribution, VaR can be calculatedthrough expected yield and volatility estimated from EGARCH model. For real estateprices with unknown distribution, VaR can be estimated by historical simulationmethod, and further calculated the pledge ratio as used for pledge loan.The result indicate that commercial banks will face lower loan risks whilechoosing lower pledge ratio assets, but relatively with less profit. Therefore,determination of optimal pledge ratio will not only help avoiding risks, but also be aneffective method to bolster profits.

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Risk Management Research of the Ubiquitous Telematics Project Based on Mobile Cloud Computing Technology for Beijing

On 04/10/2014, in IT papers, by rain

Ubiquitous Telematics device can make effective oversight of the car runningperformance, and provide integrated information service mainly focuses onreal-time traffic information service for vehicles. The servicesprovided by the ubiquitous telematics system, including the vehicle’s safetyprotection after a collision, accident Management, safety inspection service,emergency assistance service, stolen vehicles positioning service, remote emergencyopen vehicle door, park assist and dynamic intelligent voice navigation. Theintegrated information service which mainly focuses on real-time traffic informationservice can provide a comprehensive intelligent navigation service and safe drivingauxiliary for travelers. The Social benefit of the real-time traffic information service isvery significant, not only shorten the travel time effectively but also reduce carbonemissions and guidance of the urban traffic congestion.The ubiquitous telematics project is a high risk and high investmentin the emerging information services industry, furthermore the profit model andmarket prospects are not clear. Therefore, Risk Management Research of theubiquitous telematics project has very important role. The paper uses riskmanagement tools and techniques to manage risk, provide riskmanagement guidance for the project decision-making.The paper adopts risk breakdown structure to identify risks, and use fuzzycomprehensive evaluation method to quantitative analysis of project risks. Accordingto the results of quantitative analysis of project risks, the paper presents theeffective project risk response strategies. In the risk response strategy, the paper applied cloud computing knowledge toanalyze risk countermeasures, moreover, integrate the new technological which isbased on the development of Computer into risk management. This article is basedon risk identification and quantitative risk analysis, made necessary precautionsagainst the main risks of the project to reduce the disadvantageous influence of riskto the project. High-tech risks and knowledge of risk management are keyelements of the risk management research of ubiquitous telematics.

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Study on Risk Assessment and Measures of N Waterworks Construction Project

On 04/10/2014, in Management, by rain

In construction project Management process, often encounter many risk or manyobstacles, the incidence of these adverse conditions will affect the progress of the project, aswell as causing project delay delivery, or completion of the project results are poor, orfunction design not achieve the project, the project construction costs far exceeded the initialconstruction projects and so on. All this force people to project risk degree of attention paid toascend to the unprecedented levels. Although the construction project risk is morecomplicated and difficult to grasp, but with the level of project risk Management theory andpractice of capacity, Project risk not only can be qualitative and quantitative analysis, but alsothrough the risk aversion, risk control, risk transfer method tries to deal with. As a manager ofthe project, you should control the risk in the project successfully in order to succeed in theproject. In other words, you should research and emphasize particularly on the different riskin the different phases and excogitate the methods to keep away the risk. By these methodsthese loses can be reduced to zero, the project can be succeed and the output can produce thebest possible results.In the contemporary era, the project Management and the method of evolution in theproject management have developed relatively into maturity, but as an important branch theresearch about the risk management in the project is in immaturity. As a result, in this study,based on risk management theory, through practical case study methodology, and analysis ofconstruction project management in N waterworks practical problems, described the impact ofthese problems and these problems summarized as follows: natural risk, Economic risk,management risk, technology risk. In combination with the practice of construction project Nwater accumulated experience and the related theory, to N waterworks construction projectrisk assessment to the mainstream, risk management theory of the Basic measures: riskaversion, risk control, risk transfer, risk retention owned, etc as the foundation, to Nwaterworks construction project risk assessment results to improve N waterworks buildingproject risk management problem measures.Results of the study can provide some new ideas to deal with the risk for the generalconstruction industry project managers. It also helps to improve the construction project ofwater project investors in the development process of risk identification and evaluation in thedevelopment of practice, strengthen risk concept. Water project construction is a dynamicprocess, includes many risk factors. Strengthen risk management helps to many investors toidentify risks and evaluation, recognize risk essence, measures to ensure the success of the project construction of waterworks.

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Collaborative Design Project Risk Management of HVAC System

On 02/10/2014, in Management, by rain

With the rapid development of Economic and Social, the user needs personalizedincreasingly, and market changed faster and faster, so design enterprises should makefull use of network-centric information technology to integrate the various businessand community resources and use all kinds of off-site distributed resources to enhancethe design capability and competitiveness of themselves. By cooperative designapproach, a new collaborative team working model can be formed based on virtualdesigning organizational network to provide an integrated and efficient workenvironment for the HVAC (Heating Ventilation and Air Condition) systemdevelopment. In this paper, collaborative design Management issues of HVAC systemare discussed, and the main are as follows.Firstly, a cooperative design risk Management framework of HVAC system isproposed, with its system implementation. Combined with the HVAC designproblems of designing companies, and issues in synchronization, coordination andmanagement in off-site product development, a cooperative design risk managementsystem of HVAC system is built. The model includes several aspects: project-centereddesign conflict and risk Management, virtual designing organizational system withman-focused design management, management processes including managementprograms and procedures on the basis of work flow, risk-based remote collaborativerisk, quality and cost management system. The system establishes a service-orientedarchitecture and workflow engine technology based on business application practice,to complete the coopeartive design framework of HVAC system for enterprisedeployment management and Engineering applications, to achieve optimum designresource allocation of human, finance, and materials.Secondly, risk identification and assessment model of HVAC system design is put forward. Through empirical research, conflict and risk factors may be in the HVACsystem co-design are summarized. By analyzing related data and risk sources, severalkey risk factors and risk variables in a HVAC system co-design are presented, and asix-demension risk assessment index system of HVAC system co-design is builtinsluding risk probability, harm, proiroty, testablity, controllability and inforamtionasymmetry to quantitativly evaluate risk by Analytic Hierarchy Process(AHP). As forthe inforamtion asymmetry of parties involved in HVAC system co-design, thereasons for the existed conflicts and risks can be further explored by game analysis,and comprehensive risk management measures are proposed to ensure interestbalancing and collaboration of all parties in collaborative design process.Lastly, according to practical problems of collaborative risk management of HVACsystem, a comprehensive cooperative optimizating model considering risk, qualityand cost is proposed. A design quality evaluation system is also built including boththe traditional HVAC design quality requirements, and new quality requirements tocoordinate with environment composing of energy, materials, environmentalprotection, full life-cycle maintenance and others. Then, the game activities betweenquality and risk, and between cost and risk are discussed especially, resulting in acomprehensive optimization objective function of the whole risk management systemsolved by Genetic Algorithm (GA). The proposed model emphasizes customer-centered, constraint by reasonable quality cost, fullly analyze and design the overallrisk of HVAC system in the early stage of product development, to achieve areasonable cost business practice with higher quality and lower risk of HVAC designby multi-objective management.

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Research on the Risk Management of the Real Estate Investment Fund

On 02/10/2014, in Management, by rain

With the rapid Economic development, real estate industry has become China’sbasic industries, and has become the dominant Economic sector. In recent years, realestate has become a new growth point of China’s national economy, the real estateindustry as a pillar industry of China in promoting national Economic developmenthas played a pivotal role, is the country’s economic development thermometer. Tosome extent,China’s economy the healthy and rapid development is depended on thehealthy development of the real estate industry. The rapid development of the realestate industry also led to the development of downstream industries such asconsumer durables, building materials and other consumer, to promote the activeconsumer market, and even the overall economic growth. Real estate is a typicalmoney-driven industry. Since2003,the tightening trend of bank loans for real estatecompanies has emerged. In recent years the state has continuously raised throughmacro-control lending rates, the rising cost of real estate financing. On the otherhand, a large number of domestic private capital, but the lack of reasonableinvestment channels, so many small investors can not invest capital into the realestate industry, real estate industry can not share the benefits of rapid development.Well as an effective tool to resolve these contradictions, REITs will be launched inChina and REITs will be the major driving force of perfecting capital market andpromoting the healthy development. To the real estate industry and investors insignificant benefits at the same time, real estate Investment trusts of the potentialrisks can not be ignored. How to analyse and manage the risk of REITs effectively,for promoting the healthy development of China REITs has important theoreticaland practical significance.In the new century, as China’s financial markets continue to improve anddevelop their professional financial securities Investment fund advantage, securityinvestment fund has become the most influential institutional investors. In recentyears,risk Management of the Fund has become China’s financial theory in thestudy of one of the hot issues, especially the risk of open-end fund research. Thisarticle draw lessons from open-end fund risk measurement methods and use VaRmethods to measure real estate investment trust market risk. Also this articleelaborates a series of real estate investment trust risk factors, including interest raterisk, market risk, legal risk, operational risk and financial risk. Finally,this paper propose the suggestion that include perfecting risk release mechanism in REITs,perfecting policy environment and financial market system.

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Operating Performance Analysis of the Four Major State-owned Commercial Banks

On 25/09/2013, in Finance, by rain

With the development of market economy, people has paid more and moreattention to the financial industry, because its rise and fall have exerted an enormousinfluence on the development and stability of the overall Economic.The Commercialbank is the main body of the financial industry. Its business performance is in part areflection of the macro economy development, on the other hand,that is influenced bythe physical Economic.So it plays the role as the “regulator” and the “mirror”. Thehistory of commercial bank is very long, and its Management mode also undergoesseveral changes, from the initial assets Management to off-balance sheet Management,the attention of performance evaluation also transferred accordingly. Therefore, thefinancial analysis and the performance evaluation of the commercial bank can help usunderstand the condition of business development, looking for advantage andproblems to lay a solid foundation for the future development of commercial banks ofChina to form a unique core competitiveness and win victory in the increasinglyfierce competition.This article is based on the above reasons, using the financial index system to givea comprehensive explanation and analysis about the performance of commercialbanks by means of case study, and selecting four major state-owned commercialbanks of China (Bank of China, Agricultural Bank of China, Industrial andCommercial Bank of China, Construction Bank of China)2010annual financialstatements as the analysis objects. Firstly, compared financial indicators which aredisclosed in the listed bank statement with the performance evaluation indicators ofgeneral industry Enterprise, and making an analysis of the difference from the angle ofindustry specific, pointing out the defects of the financial indexes disclosed bycommercial banks. Secondly, since the bank’s management focus on profitability,safety, liquidity, this article complements and reclassify the existing financialindicators in these three aspects. According to the intrinsic meaning of the indicators,financial indicators are divided into four aspects as profitability, capital security, riskmanagement and operational efficiency, then discussing the relationship between the specific indicators and various types of indicators briefly. Thirdly, apply there-classification index system into the operating performance evaluation of four majorcommercial banks of China to identify their shortcomings and advantages in themanagement. At the same time of comprehensive analysis, pay attention to theindicators which reflect the unique attributes of the commercial bank management.Finally, evaluating the current business, risk management, cost control situation of thefour banks, and give the recommendations to improve the performance ofCommercial Banks. In addition, make outlook combined with the development trendof banking industry of China.The starting point of this article is not to reconstruct a new performance evaluationsystem, but rather focuses on the complement and re-classification of the existingfinancial evaluation and apply it to the comparative analysis of the performance ofcommercial banks. The object is to help stakeholder understand how to use financialindex this objectivity performance evaluation tool to in-depth analysis of commercialbanks operating conditions.This article has strong practical value.

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Research on Risk Management of Manufacturing Outsourcing of Shandong Shoes

On 25/09/2013, in Agriculture, by rain

Business outsourcing represents a new business strategy, that is, contractingcompany and outsourcing business supplier sign a contract outsourcing someenterprise’s traditional business or functions to the professional and efficientoutsourcing business supplier. In recent years, business outsourcing, as a newoperation strategy, has gradually been accepted by enterprises. Leaders in globalcompetition have learned to focus on the core superiorities which can differentiatethemselves from their competitors in terms of skills and knowledge. The rational useof business outsourcing not only helps to reduce company’s production costs, to shareoperation risks, and to obtain additional margin profits, also helps to strengthen thecompany’s core superiorities. Business outsourcing has brought remarkable structuralchanges to business organizations, gradually become an extension of the strategicchange, and proved to be a source power to succeed in commercial environment.However, when enterprises enjoy numbers of advantages brought by businessoutsourcing, they shall face all the possible risks. Company tends to bear inestimablerisks if it doesn’t conduct a effective analysis, assessment, and control of businessoutsourcing. Therefore, business outsourcing risk Management has important practicalsignificance.Chapter1: Introduction. This part introduces the research background and theoverview research both at home and abroad, and puts forward the research ideas andmethods. The thesis points out the inevitability of the domestic development ofbusiness outsourcing, as a new production model, by means of investigation into thestatus quo of the development of business outsourcing models internationally.Nevertheless, there are many potential risks in the implementation of businessoutsourcing, due to the immature study on the outsourcing models, uncertainenvironment faced by the enterprises, complex relationship between businesspartnered;. Not only the outsourcing expectation will not be achieved, also the irreparable damages will be brought to the enterprises, if the enterprises don’t laidsufficient emphasis on the possible risks. Consequently, study on the businessoutsourcing risk Management has theoretical significance and practical values.Chapter2: Theories on the business outsourcing risks. Giving a systematicalpresentation of business outsourcing theories and laying a foundation for thefollowing study, this thesis at first introduces the concept and the process of riskmanagement, then presents the definition and the management process of supplychain risk,and a detailed study of manufacturing outsourcing in the supply chain, atlast, elaborates the roles business outsourcing risk plays in supply chain, the conceptand the source of business outsourcing risk, the significance of business outsourcingrisk management, and supporting theories on the business outsourcing risks, namely,core competence theory, transaction cost theory and agency theory.Chapter3: The current situation of Shandong shoes manufacturing outsourcing.This part mainly presents the development and the outsourcing status quo ofShandong shoes manufacturingChapter4: The risk identification of Shandong shoes outsourcing. This part firstanalyses the reasons of the existence of the outsourcing risk of Shandong shoesmanufacturing, then systematically analyses the performance levels and the riskcategories of outsourcing risk of Shandong shoes manufacturing.Chapter5: The outsourcing risk assessment of Shandong shoes manufacturing.This thesis adopts hierarchy analysis to evaluate the selection of suppliers, andanalyses the contract risk and the quality risk during the implementation of thebusiness outsourcing.Chapter6: outsourcing risk control measures of Shandong shoes manufacturing.This part firstly defines the significance of outsourcing risk control of Shandong shoesmanufacturing, then discusses the specific methods.Chapter7: outsourcing risk management case study of XX shoes manufacturing.By means of the combination of theory and practice, in order to help the company toexecute the outsourcing risk management more properly and to provide some ideas tocontracting company’s risk management, this part takes the outsourcing of XX shoes manufacturing as an example to conduct detailed risk analysis and assessment, and toput forward feasible risk management strategies.Chapter8: conclusion and outlook. Starting from the overview of Shandongshoes manufacturing outsourcing and combining risk evaluation theory andoutsourcing risk management theory, this thesis analyses Shandong shoesmanufacturing outsourcing risk management and explores risk identification,evaluation and control measures by xx shoes as example. The research on theoutsourcing risk management needs to be deepened, and the following two aspectsneed improving: on the one hand, in the course of the implementation of outsourcingstrategy, it would be of theoretical and practical significance if the research on theoutsourcing risk elements could be conducted from the perspective of outsourcingsuppliers instead of from the contracting company only; on the other hand, thedynamic analysis of outsourcing risk needs to be strengthened.

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Research on Risk Assessment of International Engineering Contracting Projects

On 25/09/2013, in Management, by rain

With the development of world economy and the big step forward of China’sreform and opening up make China’s cause of international contracting achievementsin nearly three decades of development, and the cause of international contractingalready occupies a very important position in international contracting career inChina’s construction industry. However, the risk factors faced by the internationalproject is complicated and numerous, coupled with imperfect Management of China’sconstruction enterprises, especially risk Management is weak, those two factors makeChina’s construction enterprises in the international Engineering contracting projectsfacing huge the risk of challenge. It is urgent need to develop and strengthen the riskmanagement of international Engineering contracting projects, especially riskevaluation studies, because it is adapt to the requirements of the internationalenvironment, meet to the needs of survival and development of the Enterprise, meet tothe pursuit of Economic interests of the construction industry Enterprise, improve theexisting problems of China’s construction enterprises in international projectcontracting.This article based on our international engineering contracting projects. Combingthe characteristics of international projects in china, in accordance with the system’spoint of view, built the International project contracting, project risk evaluation indexsystem. Then proposed a risk evaluation method—-A MF (E)method. Using thismethod in the project before making any decision can provide a basis for decisionmaking for policy-makers; Using this method in the process of construction of theproject can track risks timely and discover the new risk factors, so the enterprises candynamically manage risk and improve the ability to resist risks.

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The Application of Economic Capital

On 25/09/2013, in Finance, by rain

The word economy has been hit by the financial crisis, but also the global insurance industryseems to be a stage of the development of the downturn. Foreign insurance companies have been defensiveor even managed an exit from Chinese market, meanwhile, the development of Chinese insurancecompanies have also entered into a period of slow growth rate. Under express financial crisis, for Chineseinsurance companies, it’s not only a challenge but also an opportunity. Whatever the regulator or theinsurance company itself are looking for how it can enhance the ability to resisting risks and how it cancreate more value under this circumstances.Economic capital is an internal Management tool to combine the risk and capital Management. Therisks can be quantitatively described by Economic capital, so this framework can consummate thecomprehensive risk Management. Economic capital is also a value indicator in order to evaluate the realperformance of product line and business unit. Through almost40years, the framework of economiccapital has been fully practiced in advanced commercial banks at home and abroad. Foreign advancedinsurance company has also found the advantage of the economic capital. So it has been introduced intoinsurance industry and introduced into China.Economic capital management involves the knowledge of finance、insurance、risk management andfinancial management, so it is a complex approach. It need the support of management concepts、mathematics models、historical database、information system and theoretical research. In addition to this,the concept of economic capital has been introduced to China for only8years. So in our country thenumber of theories regarding economic capital is few and we do not have any practice experience. Butlucky, more and more insurers pay attention to researching on it. As it is said by Wei Yingning onInternational Actuarial Seminar that economic capital is a new concept of risk management in insurancecompany. It is believed that economic capital management will be practiced in Chinese insurance company.Based on many researches at present of economic capital of academic, firstly, this papersummarizes the development history and practice of the economic capital management in commercial banks. This process makes better measurement of economic capital, so it is layingthe groundwork for an application in another industry. Secondly, this paper pays attention tothe combination of induction and deduction, and analyses the possibility of the practice ofeconomic capital based on the business and the risk in insurance industry. Thirdly, through acase of ING Insurance, this paper shows the practice of economic capital management andsome key approach. Finally, this paper designs a conceptual framework which involves thekey factors of economic capital management, according to the environment in our country.