Problems And Standardized Development Policy Suggestions Of Credit Guarantee Agency In China

SMEs play an important role in the economic prosperity and increasing employment, promoting innovation, and are important force for promoting China's economic development. However, due to China's capital market imperfections, direct financing of SMEs is limited. The bank loans based indirect financing are difficult to meet because of lack of credit, business instability and poor ability to resist risks. SMEs face serious financing problems. An effective way to solve the financing difficulties of SMEs is to establish credit guarantee institutions.From 1993, China's first security agencies-China Economic and Technological Investment Guarantee Co., Ltd. was established, that Indicates that China guarantee agencies started. After nearly 20 years of development, China's SME credit guarantee institutions continue to grow, As of the end of 2010 China's total SME credit guarantee institutions is 6030, carry out a financial guarantee business cooperation with 10321 banking financial institutions (including branches) and guarantee the amount of 1.1503 trillion yuan. The number of guarantee agencies and the development of business make a rapid development, however, the quality of guarantee institutions has appeared uneven, and guarantee agency business has a lot of chaos and these not only affect the image of the guarantee industry, and even disrupt the normal order in financial markets. Therefore, operation and development of guarantee industry institutions should be standardized.Beginning in 2009, the State Council issued a document that instructed that Joint Guarantee Agency composed of seven ministries led by the CBRC were responsible for joint supervision of the national security agencies, and the local government was responsible for the supervision of local security agencies. Supervision of security agencies began to identify from that. March 2010, seven ministries issued "Interim Measures financing guarantee institutions" and eight supporting systems, and a national standard consolidation started.This paper summarizes the development of guarantee agencies of the country, since 2001 to grasp the overall development process of China's security institutions and development status and combined with the practice of China's financing conduct a separate study and research of guarantee institutions and non-financing guarantee institutions. Propose market positioning, business operating, banking cooperation mechanism, capital compensation mechanisms, risk control mechanisms and regulatory mechanisms have to be standardized for financing guarantee institutions, In addition to the above of normative issues, Non-financing guarantee institutions face more severe problems of the access mechanism, scope of business operations, risk control, monitoring mechanism and should be standardized..This paper put forward China's current financing guarantee institutions and non-standard financing guarantee institutions reorganization proposals based on the current regulating and rectifying situation of our guarantee agencies. This paper argues that financing guarantee institutions'market position should belong to the non-bank financial institutions, and should be carried out supervision and management by the Banking Regulatory Commission. It is necessary to further regulate business of financing guarantee institutions. Make math analysis of capital compensation of guarantee agencies, guarantee magnification and propose that the amount of compensation the guarantee agencies should ensure that capital funding can be secured agency debt, the best magnification of guarantee institutions should make the largest institutions and banks' total income. For the guarantee agency risk compensation mechanism, regulate the management of re-guarantee institutions. The guarantees Union should be established to regulate the guarantee agencies'cooperation and propose the construction of a guarantees Union of the specific ideas and frameworks. For non-financing guarantee institutions, non-financing guarantee that should also belong to non-bank financial institutions, should be supervised by the Banking Regulatory Commission and should be implemented to license. Non-financing guarantee institutions'business, risk control and monitoring mechanism should also be reference to financing guarantee institutions management approach to make corresponding standard development.