The Study Of How G Bank Can ‘Look Through' The Letter Of Credit Business

In the recent years,as the development of our international business,the financial market risk becomes more and more complicated.So,in the face of the difficulties,the related financial regulators streamline administration and delegate power to the lower level in order to promote the business development,but at the same time it also required financing institution must to “look through” the business applications.It means when financing institution face to the applications,they need to survey all-sided circumstance of their clients in order to control the risk from the origin.Meanwhile,as the tool of international settlement,when the banks process the letter of credit business,they also need to aware of the international situations,such as the US secondary sanction.How to avoid the sanction also be another problem for banking letter of credit business.On the other hand,we all know the “independent principle” and “apparent authenticity” are the fundamentals of letter of credit business.Obviously,this fundamentals conflict with the regulatory authority no matter of domestic or overseas.So how to balance the business and the regulations,become a big problem for the banking industry.Firstly,by understand of the domestic and overseas regulation requirement and the statistics of punishment of banking industry,we can know the general situation the banking industry is facing.And then,the article introduce the model of how the LC business process in the bank,especially the G bank process.And it also introduce the general situation of G bank letter of credit business through the date analysis.Based on the understand of the general situation of the domestic and oversea regulation requirement and the general condition of the G bank letter of credit business,this article move forward a step,to analysis what risks would have during the penetration process of letter of credit business and what kind of process should be the penetration process.After this analysis,the article made an investigation in the G bank.Based on the data of questionnaire and the understanding of the regulation requirement and condition of G bank,we find out what problem the G bank has when they want to penetrate the LC business,and the cause of formation.Finally,targeted the problems G bank has,and based on the requirement of regulations and some good methods the other bank adopt,this article makes several measurement and suggestions for the headquarters and the sub-branches of G bank how to execute the ?look through? process of letter of credit business.