Research On Risk Management Of International Trade Finance Of Commercial Banks In China

Recent years, international trade financing business got unprecedented development in our country, this kind of business had became one of the most important growth point of bank。So, all banks attach great importance to carry out this business. At the same time, the global financial crisis triggered by U. S. subprime problem not only conplicated the international financial environment but also forcing people to have to pay more attention to regulation of the financial risks. Accordingly, how to do a successful risk management of international trade financing business which closely associated with financial environment became a prominent problem. This paper combined theory and practical to study the theme of the risk management of bank trade financing business in china. Firstly, this article discussed the primary methods of trade finance business and related international settlement business, and discussed variety of trade finance business products’features and business processes like Issuing Letter Of Credit, Import Documentary Bill, Forfaiting, Packing Loan, and so on. Then, it carried out analysis about the risks of bank trade finance business. Combining with the characteristics of trade finance business, this article focused on the contents of types of risks, risk reasons, how to control the risks, risk measurement etc. Subsequently, the paper studied an example of Bank Z,pointed out Bank Z’s shortage at trade financing risk management and gave improvement suggestions. At the end of the paper, the author gave specific recommendations and practices for improving trade financing risk control. Real business cases of bank trade financing are applied to this paper, through analysing these cases, the author felt the severe losses for banks and their customers resulted by business risks deeply. So, the auther hope this article could bring a tiny benefit for helping chinese banks to reduce the risk of trade finance.