The Risks Management On The Corporation Between Commercial Banks And Credit Guarantee Institution

With the growth of guarantee institution, the credit guarantee system among smalland medium-sized enterprise has begun to take shape since the year of1992.In order tomeet the fund demand of small and medium-sized enterprise, credit guaranteeinstitution makes great contribution to broaden financing of small and medium-sizedenterprise, while there still emerge many troubles during the process of itsdevelopment. In such system, the cooperation betweenn commercial bank andguarantee institution is very important. Commercial bank only takes its own assertssafety into consideration when cooperating with guarantee insitution. Therefore, thecooperation exerts great influence on credit guarantee system. And having a deeperanalysis in risks during the cooperation and building scientific risk identification andregulatory mechanism can make commercial bank more actively, give full play toleverage effect of guarantee institution, and maintain the normal operation of creditguarantee system.The present study tends to analyze the cooperation between commercial bank andguarantee institution and its risks from the following aspects and help commercial bankto improve their ability to recognize risks, as well as to build effective risk preventionand compensation mechanism, promoting the harmony in cooperation.First, combing the classical theories of credit guarantee like informationasymmetry, risk shifting, market failure, adverse selection with our domestic praces,the essay gave a detailed explanation of the function of guarantee system.Secondly, from financing distress of our small and medium-sized enterprises, theauthor analyzed information asymmetry between bank and enterprise to improve thesuccess rate of consumer and bank commercial loans, lower the risks and managementcosts, and promote the smooth operation of guarantee system as well as proved thenecessity of cooperation between bank and guarantee institution.Thirdly, the essay gave a further analysis in the troubles emerged from the cooperation from microscope and microscope perspective and in the categories of risks,as well as summarized the reasons for risks, which lays a foundation for futureresearch on specific risks and preventions.Finally, the case of cooperation between Jilin Province DH commercial bank andguarantee institution was employed to have an in-depth analysis. Through the analysisof theories and experiences in the cooperation between bank and guarantee institution,the essay explore the specific approaches of risk identification, evaluation andprevention in such cooperation to establish a harmonious relationship between bankand guarantee institution and provide proper suggestion to improve the creditguarantee system.