Research On The Credit Risk Management Of Confirming Warehouse Of Commercial Bank

Business competition intensified, and the way of competition has shifted from individualcompetition to the competition between the supply chain. The supply chain management oftencannot meet the funding needs of the upstream and downstream enterprises, so that supplychain finance emerged. Supply chain finance effectively mitigates a series of problems, suchas information asymmetry, and the lack of the guarantee mechanism. Not only can it solve thefinancing problem of small and medium enterprises, but also provide the opportunities forcommercial banks to develop new markets. It is a strategic choice of commercial banks tospeed up transformation. Confirming warehouse business is one of the important forms ofsupply chain financing. Commercial banks extensive confirming warehouse operations,facing the credit risk which cannot be ignored.In order to study the credit risk management of confirming warehouse business, thispaper chooses the empirical methods of case analysis, and selects H bank’s confirmingwarehouse business for Q company. Through case study, this paper analyzes the financingarrangements for the enterprises on the supply chain, and the credit risk of confirmingwarehouse business and the corresponding credit risk management measures. Then putsforward the problems of credit risk management, and gives suggestions for improvement.First of all, the financing arrangement for the borrowing enterprise shows thatconfirming warehouse business can bring the borrowing enterprise leveraged effect, anddevelop sales channels of the supplier, at the same time, improve the competitiveness of thebank. Secondly, this paper analyzes the credit risk in the case from the aspects of systemic andnon-systemic credit risk. The results shows that when the commercial banks do business ofconfirming warehouse, they face credit risk from the industry and suppliers, or dealers andgoods quality. Again, this paper analyzes the measures of H Bank to mitigate the credit risk,which including the review and confirmation of enterprises, and the settings of confirmingwarehouse business, and post-loan management measures. The result indicates that improvingthe credit risk management system can effectively mitigate credit risk. Finally, problems still exist in the credit risk management of H bank, so that the paper puts forward suggestions suchas selecting warehousing regulators, and creating an electronic platform, and using financialderivatives.