Research On Risk Sources And Control Of Commercial Banks’ Financial Business In Cross-border M&A Financing

With the steady growth of China’s macro economy and the further promotion of the development strategy,more and more domestic enterprises are involved in the transnational merger and acquisition activity to meet the needs of development.Because of the high requirement for the amount of money,most companies’ internal capital is not enough to complete cross-border mergers and acquisitions.Therefore,transnational merger and acquisition financing is an important premise for enterprises to realize transnational mergers and acquisitions.In December 2008,the state council deployed the financial policy.This policy enables commercial Banks to participate in cross-border M&A(Mergers and Acquisitions)financing activities in the form of M&A loans.Cross-border M&A loan is the credit granting business of commercial bank.Compared with general loan business,the complexity and risk of cross-border M&A loans are higher.Therefore,commercial Banks should focus on risk control.Currently,relying on commercial Banks to handle cross-border M&A loans is still the preferred financing channel for most Chinese enterprises to conduct cross-border M&A activities.Based on the analysis of a real case that bank Y handles cross-border M&A loans for T,This paper discusses the investigation of credit business process and logic of commercial Banks under the condition of cross-border M&A,explore the risks of commercial banks in credit granting business and by establishing the risk assessment index system of Y bank to assess risk level.Finally,according to the case,the paper proposes the risk source,the methods of risk control and the recommendations for risk control.