Research On The Risk Management Of Trade Financing Business In Bank Of China Lvliang Branch

Abstract:Trade financing refers to the behavior of banks providing financing to companies, which is based on domestic and foreign trade settlement. It can have a wide range of positive effects through granting customers to a certain amount of financing and providing importer or exporter in international trade and buyer or seller in domestic trade with series of credit products. With the rapid development of global import and export trade and domestic trade settlement, more and more companies seek bank to provide the corresponding trade financing services. So trade financing business in banks has developed rapidly. However, there are certain risks in the development of trade financing business. If mishandled, trade risks of companies are likely to pass on to the banks directly. So banks take the risk management of trade financing business seriously when expanding trade financing business actively.This paper takes Bank of China Lvliang branch as research object. Firstly, on the basis of the relevant theories and the literature home and aboard, the paper summarizes the trade financing business profile and major trade financing products and processes in Bank of China Lvliang branch, and then analyzes the main risks of trade financing products, such as import bill, etc., and the current situation, the existing problems as well as the reasons of risk management of trade financing business. Followed by applying the trade financing system through Z enterprise, one of customers in Lvliang branch, for specific trade financing case, which accurately quantifies the risk factors that appear in the financing process, considers the income level as well as the ability of risk management. Finally the paper proposes countermeasures of trade financing business risk management recommendations from improving overall risk management, diversification of financing business marketing strategy, regulating trade financing business credit approval process and paying attention to the construction of trade financing talent team in BOC Lvliang branch.Based on the risk management analysis of trade financing business in Bank of China Lvliang branch, it is considered to have guiding significance for the right choice for trade financing form of domestic commercial banks to obtain maximum financing revenue, effective prevention and control of trade financing business risk, and improve business development and trade financing risk management status and maximize the benefits and profits.