The Prevention And Treatment On SME Private Bonds Default Risk

To solve the financing problem of small and medium enterprises and promote the development of Chinese economy, on May22,2012, the Shanghai and Shenzhen Stock Exchange issued a "SME private debt business pilot approach". The SME private bonds will be officially on the market to provide new financing channels for small and medium enterprises and solve the long-standing problem of SME financing. With the rapid development of small and medium private debt, the risk management issues become increasingly urgent.Through the interpretation of the relevant government policies, laws and regulations, industry regulations, combined with the author’s own practices, this paper analyzes the SME private bonds in a approaching way.By introducing the development experience of foreign high-yield bonds, citing the relevant data and practical cases, this paper reveals the problems of the SME private bonds and potential risks, and makes recommendations. The full text is divided into four chapters.The first chapter, the author introduces the background and significance, and the status of related research papers, and leads out the object of study-SME private bonds.The second chapter, the author introduces the development and features of SME private bonds in a comprehensive and systematic way, presents the current laws regulations and industry rules related to SME private bonds and the implementation situation and reveals the problems and potential risks at last.The third chapter, the author introduces the development experience of foreign high-yield bonds.The fourth chapter, the author proposes the solutions and develop recommendations according to the problems and the risks presented earlier.In summary, through the analysis, the author believes that the future of SME private bonds is bright, but the road is bumpy. The market participants need work together to improve the system and mechanisms of SME private bonds and enable it to become more mature. And under the premise of risk control, the SME private bonds will play a a greater role in solving the financing problems of SMEs.