The Risks And Measures Of Letter Of Credit In Commercial Bank

With the rapid development of economic globalization and our country’s foreign trade, China has surpassed the United States as the largest trading nation in the world. International trade finance business which can bring high-incomes has become the emphases in Chinese commercial banks. Letter of credit is so common and important in Trade financing. Letter of credit’s history should dates back to the half of the 18 th century, it is a settle accounts tools which has a long history. Although the letter of credit is based on the credit of the bank, it can reduce the risks of import and export enterprises, it is propitious to conclude the transaction, this settlement is not without risks, also the banks. This article is to research the bank as the principal parts faced the risks under the credit financing business and the preventive measures.This article is divided into six parts, the first chapter is foreword, it contain the sense of the research, chapter 2 is the literature summary, chapter 3 is the concepts of L/C and introduce the primary trade financing model, chapter 4 go deep into the reason of risks in commercial bank, chapter 5 and chapter 6 elaborate the main kinds of trade financing model’s risks and the preventive measures. The last chapter is the conclusion.