Analysis Of The Causes And Strategies On Commercial Banks’ Trade Financing Risks

In recent years, China’s import and export trade has maintained rapid growth trend. Commercial Banks seize the opportunity to develop trade financing which greatly increases the volume of business and becomes one of the important business of banking industry to create profits.But benefit and risk coexist. when benefiting from the trade finance, commercial Banks also face a number of risks at the same time. In the period of economic rising, the rapid development of foreign trade promotes the development of trade financing business, which brings huge gains for Banks. But it conseals the problems of weak risk-prevention consciousness and limited control measures, and sows the seed for the broke-out of trade financing risks in the period of economic downturn later. In the past two years, influenced by the the worldwide economic recessing and the European debt crisis, the risk of foreign trade increased. And the risk of bank trade financing is also becoming more and more serious. In addition to the malicious fraud of companies and defects of the Banks’ own risk control, many commercial Banks face the problems of overdue advances for trace finance, and the consequences of this kind of problems continue to deteriorate.After consulting a large number of literatures, the author startsfrom the related theory of trade financing of commercial bank, introduces the main characteristics and classification of trade finance, as well as the significance of developing trade financing to Banks and businesses. Briefly discusses the origin of trade financing risk and the policy risk, market risk, credit risk and operational risk it’s facing. Taking Banking trade financing business inRizhao area as the research object, and some typical cases in the banking sector in this region as the breakthrough point, this paper carries on the thorough analysis to the case and explains the main reason for its happening, points out the causes of the current trade financing problems which can be divided into external cause and internal cause. External cause mainly includes the close relationship of trade financing and the real economy, enterprise credit risk, government intervention and national policies; internal cause mainly includes bank’s operational risk, credit review before missing, product mismatch, Banks’ lack of internal departments coordination, and the lack of forward-looking for the fine of system construction, etc. It also emphasizes the importance of enterprise credit review before missing, being sure to verify the trade background of the enterprise, the reasonable matching of trade finance products, completing the post-loan management at the same time, making up recovery monitoring, and ensuring the realization of trade financing from sex.This paper gives some more specific opinions for the reasons of trade financing risk and puts forward the viewpoint of "business development, system first". Institutions at all levels should regulate policy system construction, and lay the theoretical foundation and give legal support for trade finance development. It also gives a series of construvtive risk-prevention suggestions from the aspects of before-loans, in-loans and afer-loans. Suggestions on improving the quality of the bank and enterprise employees are also mentioned. They should rengthen the communication with the third parties, and acquire information through various channels to circumvent the unfavorable factors brought from the risk of national policy.