Smes Collection Of The Credit Risk Of The Bond Measure Study

Assemble bond for small and medium enterprises (SMEs) is a financial innovative product emerged during recent years in Chinese capital market, which is major breakthrough of SMEs financing. It is not only valuable for Chinese SMEs to promote the growth of SMEs assemble bond by researching, but also contributes to the study of SMEs financing. Like any other new born financial product, there are some problems waiting to be solved. One key problem is the measuring of credit risk. Because the issuers of Assemble bond are all SMEs, they possess high credit risks. Moreover, after bonded together, the measuring and controlling of general credit risk become very complex.This paper divides the credit risk of Assemble bond into three parts:risk of each issuer, risk of the bonded entity and risk of the guarantee. Based on the deliberate study of the distinguishing features and characteristics of each risk, the paper introduced theory of incomplete information broken window theory and theory of endogenous bankruptcy to analyze causes of Assemble bond's credit risk. Furthermore, on the ground of former domestic and abroad study, the paper propose a general method for measuring the credit risk of Assemble bond, then analyze the effect of credit enhancement by guarantee and re-guarantee. This paper consider large portfolios of Assemble bond issuers, under the application of reduced-form model, using markov chain to depict the credit contagion effect among different firms. Then it provides a statistical model for the effects of credit contagion and investigates their consequences on the level of both the whole economy and large portfolios. Finally reach the conclusion that when the macro-economic factors are highly uncertain, credit contagion has limited impact in the loss distribution of Assemble bond; when the uncertainty of macro-economic factors are low, credit contagion has obvious impact in the loss distribution.In the end, this paper proposed that improvements in the aspects guarantee enforcement, bond credit rating, default risk management, cost control and government policies. Meanwhile, some advices regarding how to improve the financing mode of SMEs assemble bond are given.