Research On The Risk Control Mechanism Of The AIIB Loan

As the second multilateral development institution in Asia after Asian Development Bank(ADB),AIIB aims at providing financial support to infrastructure.Nowadays,it is difficult for the World Bank(WB)and ADB to resolve the imbalance result from the rapid economic growth and the gap in the financing of infrastructure.In order to develope regional economic and increase regional interconnectivity,AIIB initially focus its business on transportation,energy,infrastructure in rural and urban area and logistics infrastructure facilities including warehousing and delivery.TThis paper is based on the facility of AIIB with fully analyzingthe risks in financing deals,,the risk management mechanism and risk evaluation and control system.This paper consists of three parts and four chapters: Introduction,Body and Conclusion.The first chapter makes a briefly introduction to the principle,function and legal nature of AIIB on the basis of The Articles of Agreement of Asian Infrastructure Investment Bank and the business model of AIIB.The second chapter discusses the risks faced by AIIB in providing facilities,including the risks faced in the sovereign facilities-credit risk,market risk,liquidity risk,operational risk as well as the risks in the non-sovereign facilities.This chapter also makes a discussion about the terms and conditions in the documents of AIIB..The third chapter analyses the risk control mechanism and the conditions of its facility agreement and other documents.The risk management framework states the method of evaluating risks before the facility and controlling risks after the facility,which can be regarded as the guidance for the specific a loan project,the risk management framework a makes a requirement from two different angles in other to build a comprehensive risk management and control system in the process of facility of AIIB.Based on the analysis of the existing methods ofrisk management,the fourth chapter makes suggestions on the risk prevention with the experiences of the WB and ADB from the perspective of legal regulation.