Guarding against and resolving financial risks is of paramount importance in winning the three critical battles. The task of guarding against and resolving financial risks is complex and multifaceted. Financial regulatory authorities cannot approach it with a "one-size-fits-all" mentality; instead, they must leverage their own responsibilities and powers to fully exert the role of financial market supervision and management, providing strong institutional guarantees for financial security.
Firstly, to guard against and resolve financial risks, financial regulatory authorities need to hone their internal skills and enhance their level of financial supervision and management.
- Strengthen financial regulatory responsibilities. For a long time, financial regulatory departments have borne the dual responsibilities of supervision and industry development, which can lead to conflicts between the two objectives. Financial regulatory authorities must balance these, often resulting in a focus on development at the expense of regulation. It is essential to solidify the regulatory responsibilities of financial authorities, encouraging them to concentrate on financial supervision and truly implement it.
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- Improve financial regulatory methods and approaches. The common methods of financial regulation mainly rely on external supervision by financial regulatory authorities, self-regulation by financial enterprises, and social supervision, with legal and economic means being primary, supplemented by administrative measures. However, with the advancement and development of financial technology, the financial industry has spawned many new business forms, undoubtedly increasing the difficulty of supervising financial institutions. Therefore, financial institutions need to innovate in their regulatory methods and approaches to better fulfill their duties.
- Enhance the comprehensive capabilities of financial regulatory personnel. Professionals in financial regulatory authorities, whether in approval, analysis, identification, judgment, or resolution of financial risks, need to possess solid financial theoretical knowledge and rich practical experience. Especially in today's closely connected global financial landscape, with continuous financial innovation and the emergence of new financial business forms, the requirements for the comprehensive quality and capabilities of financial regulatory personnel are increasingly high. They must not only understand finance but also master a comprehensive knowledge in various fields such as economics, law, and financial technology.
- Expand the scope of financial regulation. One of the goals of the reform and optimization of the financial regulatory authority system in recent years has been to increase the coverage of financial regulation. For a long time, the banking and insurance industries have had numerous intersecting areas with strong interconnections during business progress, making mixed-industry regulation a persistent challenge. The reform and optimization of financial institutions have provided strong institutional guarantees for resolving mixed-industry regulation and expanding the scope of financial regulation, with comprehensive coverage in the financial sector becoming a trend.
Secondly, during the process of fulfilling financial regulation, financial institutions must also ensure that policy measures are as precise as acupuncture points.◇Coordinate the relationship between financial institutions and financial enterprises. Dialectical materialism clearly points out that external factors must work through internal factors. Relying solely on external regulation by financial institutions cannot completely solve the problem of financial risks; it is necessary for financial enterprises themselves to establish a set of mechanisms and institutional arrangements for risk prevention and control. Therefore, financial regulatory authorities must urge financial enterprises to strengthen the construction of internal control systems and to take their own risk prevention measures.
◇Balance the relationship between regulation and service. Financial regulatory authorities must transform their regulatory philosophy and build a partnership with the regulated financial enterprises. They can proactively understand the actual difficulties faced by the regulated entities, provide legal and policy consulting services to financial enterprises, and reduce the probability of financial risks caused by human factors within financial enterprises. At the same time, for financial enterprises that deliberately test or touch the legal red line, penalties should be imposed in accordance with regulations and rules.
◇Grasp the measure between regulation and innovation. In practical work, financial regulatory authorities must pay attention to the current development status and future prospects of financial enterprises, and make detailed discrimination. Based on this, they should implement targeted policies to make the financial regulatory mechanism more flexible and elastic. For those enterprises with development prospects and representing the direction of financial innovation, financial regulatory authorities can provide appropriate support to promote financial innovation and development, and to enhance the overall development level of the financial industry, thereby reducing financial risks.
◇Utilize professional forces. To enhance the professional level of financial regulation, financial regulatory authorities must not only practice their internal skills but also rely on other external forces to achieve precise regulation like "Sunflower Pointing Acupuncture". For example, they can cooperate with technology companies such as cloud computing, big data, and artificial intelligence to improve the technological level of financial regulation; or they can cooperate with legal institutions to use legal professional forces to form a joint force to prevent and resolve financial risks.
Whether it is practicing internal skills or mastering "Sunflower Pointing Acupuncture", capable financial talents are needed to implement and execute in order to achieve the expected results. The current situation is that there is a significant talent gap between high-level financial risk management talents in China and the actual demand. In particular, there are even fewer financial risk management talents holding the FRM certificate. According to incomplete statistics, there are less than 10,000 FRM certificate holders in Mainland China.
So, what is so special about FRM talents that they are so valued? What can one gain by passing the FRM exam?
The FRM is developed by the Global Association of Risk Professionals (GARP) in the United States and has a history of many years. It has become a professional certificate in the field of financial risk management and has been widely praised by professionals in the field.
The FRM exam has two levels, with a total of nine subjects, such as Foundations of Risk Management, Valuation and Risk Modeling, Financial Markets and Products, Quantitative Analysis, Market Risk Measurement and Management, Operational and Integrated Risk Management, and Cutting-edge Topics in Financial Markets. The focus of each level of the exam is different; the content of the FRM Level 1 exam focuses on the basic theoretical knowledge of financial instruments; the FRM Level 2 exam emphasizes the application concepts of financial risk management and the practical application ability of financial instruments. This ensures that FRM candidates meet the basic capabilities required to be FRM certificate holders.
At the same time, the FRM Association invites senior professionals in global financial risk management to participate in the update of the FRM exam content every year. This is also to ensure that candidates can timely understand and master the latest concepts and methods in global financial risk management.Through these comprehensive and systematic learning experiences, a knowledge framework covering various areas of finance will be constructed for candidates, enhancing their understanding of financial risks. They will be able to identify potential financial risks from the unpredictable financial markets and formulate reasonable and effective risk response plans in a timely manner, building the first line of defense against risks for financial institutions and enterprises.
Financial risk control professionals holding the FRM certification have become a scarce resource in the financial risk control talent market. They are recognized and appreciated by financial regulatory authorities, financial enterprises, and large enterprises with risk control positions. This has attracted more and more financial professionals to compete for the FRM, hoping to take a significant step towards becoming a high-level financial risk talent.
Becoming an FRM holder also means that the range of career choices for individuals is further expanded. In addition to financial regulatory authorities, investment banks, commercial banks, asset management companies, hedge funds, insurance companies, consulting firms, and more are all positions that FRM holders can pursue. Many people have successfully moved from the lower levels of finance to the management level, achieving a dual leap in personnel and position. Preventing and resolving financial risks is crucial for financial security and national security, and the future prospects for financial risk control professionals holding the FRM certification are promising.