Credit Default Swaps In The Financing Of SMEs In China

Since 2000,the economic of our country has got into a period of fast developing,but after the American financial crisis broken in 2007,our economic has been involved too.As on of the most important part of the country,the small and medium enterprises(SME) play an key role in the adjustment of industrial structure.However,because of the own problems of the SMEs,it is difficult for them to borrow money in the normal ways.In order to solve this problem,this article try to use credit default swaps(CDS) in the financial market of SME.In the beginning of the article,we first research the financial market of SME in the marco econimic environment,and we also made a review of the theory research of both financial market of SME and CDS.After that,we introduce and analyse them in detail.For example,we analyse the transaction theory of the CDS and the develop histroy of it.In this part,we try to make the reader to understand both of the character of this research.After that,the article try to make this two character together.Fist we try to use the reality of the finanical market of the SME as the foundation,so that we could choose the pricing modern of the CDS.In the Western countries,there are two kinds of pricing moderns for pricing CDS.One kind named stucture modern, the other kind named reduced modern.The most important difference of them is that the attitude to the default probabilty.After contrasted of both these two kinds of modern,we founded that because of the data of the SME is hard to get in our country,its difficult to use the stucture modern in price CDS.As a comparison,the reduced can be use if some prerequisite work have been done.As the conclusion,we suggest some advices in the reality use of the CDS for the SME financial market.The advives included the establish of the credit rating system and some of the risk manage methods to manage the risk of CDS.The most import inovation of the article is make both the finanical market of SME and CDS together to solve the economic problem of our country.And this is also the object of the research.