The Research On Trade Financing Innovation And Risks Management Of Commercial Banks

As the expansion of the scale, quantity and scope, the international trade becomes more and more complicated and uncertain. Both parties involving in international trade are in a controversial situation between the willingness of conclusion and the fear of risks. In such case, international trade financing of commercial banks becomes a resolution for fund financing of importers and exporters. There is an obvious gap in science and management level, financial service and operation manners between international commercial banks and domestic banks. Traditional operation mechanism, management mode and product design inside domestic banks cannot satify the enlarging need for trade financing. Therefore, according to realistic constraint faced by trade financing of domestic commercial banks, this paper studies the train of thought, strategy and method of trade financing innovation. It possesses important theoretical value and realistic meaning for ameliorating the underdeveloped situation of trade financing in domestic commercial banks and improving the operating efficiency and innovation ability.The existing literature about trade financing innovation at home and abroad mainly focuses on innovation motive and product innovation, but theory study doesnot combine with practice well, because of lacking innovative study angle. Based on cost, risk and revenue of trade financing innovation, this paper builds a general equilibrium model of trade financing innovation in commercial banks by analizing requiring motive and supplying factors. It puts forward a new general train of thought consisting of market innovation, institution innovation and business innovation, and conducts a further research on identification, evaluation and management of risks.Firstly, according to competitive situation and market structure feture, this paper explores constraint factors in market which obstruct the development of trade financing. Based on comparing the advantages and disadvantages between traditional financing methods and supply chain financing, this paper elaborates the thought and general structure of financing supply chain design, combining the theory of supply chain management with trade financing, and puts forward trade financing innovative modes such as core client eapansion, intermediary client accumulation and core client coopertative expansion. Secondly, referring to the theory of bank reengeering and financial innovation, this paper proposes the carriers of trade financing institution innovation of commercial banks, e.g. organizational restructure and business process innovation, and analyzes the methods of internal and external restructure. According to carding of existing trade financing process, it explores the manners of trade financing process innovation of commercial banks. Thirdly, expanding Desai and Low's the characteristics model of financial innovation, we can conclude the theoretical space of trade financing product innovation of commercial banks. Based on the definition for profitability, riskiness and liquidity of existing financing products, this paper designs the trade financing products, using principle of partition and combination. According to clarification of trade financing innovation risks of commercial banks, this paper builds an identifying frame and evaluating indicator system consist of internal risks of market innovation, internal risks of organization sructure and process innovation, derivative risks of partition and combination. Through establishing a client list and security rating, we build CCFR model for risk evaluation, and then choose analytic hierarchy process to carry out one case study for some commercial bank. At last, this paper builds a complete internal control system. Depending on the methods of insurance compensation, incentives and supervision and simplifying organizational structure, it brings up risk allocation and evasion mechanism of trade financing innovation of commercial banks.