Research On Risk Of The Financing Product Of Credit Loans

In the year of 2008,our country carried out tight monetary policy and tight fiscal policy.The lending criteria of many banks can not be implemented because of the tight monetary policy. All of these affect the profitability of the bank. In this context,many commercial banks adopt issuing financing product of the trust loans to solve this problem for the sake of the profitability. In the First Half of the 2008 ,it has record the sales volume of 900.In the year of 2009, continued excessive supplies of money and credit forming plentiful liquidity.But the subscription is getting higher and higher.In November 2009,it has break the sales of 300.The profitability of the financing products is well above the profitability of the time deposits at the bank and it is getting higher and higher accompanied by the increasing of the sales. Although it has high-yields many investors even can not trace the funds .Although many financing products have expired and seldom lose out the risk is brewing in the prosperous. To take this further, the operating mechanism of the trust loans is similar to the CDO who has set off the subprime lending crisis.They both have collateral security and depend on the future cash flow of the borrowing venture.They both transfer the operation from the inner of the balance sheet to the exterior.Once the price of the assets get down.It may bring out subprime lending crisis of china very likely.The dissertation analyses the similarity and the divergence of both the products.We can find out the high-stakes in the back of the high-profitability.At last we will recur to the example analysis to point out the problem of over-pricing and make further efforts to approve the high-stakes in the financing product of the trust loans.